Question : A sum of money becomes INR 35,680 after 3 years and INR 53,520 after 6 years at a certain rate percentage p.a., interest compounded yearly. What is the compound interest on the same sum in the first case? (Your answer should be nearest to an integer)
Option 1: INR 11,983
Option 2: INR 11,893
Option 3: INR 10,842
Option 4: INR 11,938
Correct Answer: INR 11,893
Solution :
Amount after 6 years = INR 53,520
Amount after 3 years = INR 35,680
Principal for next 3 years = INR 35,680
Principal =
We know that,
For 1st case:
⇒
For 2nd case:
⇒
⇒
From equation 1 and 2, we get:
⇒
⇒
⇒
Compound interest for first 3 years = 35,680 – 23,786.66 = 11,893.34 = 11,893 (nearest integer)
Hence, the correct answer is INR 11,893.
