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- The simple interest on a sum of money for 3 years at 6²/3 % per annum is $ 6750.
Question 1:
The simple interest on a sum of money for 3 years at 6²/3 % per annum is $ 6750. What will be the compound interest on the same sum at the same rate for the same period, compounded annually? A. 8125
B. 6655
C. 4496
D. 7210
Feedback Given, SI = $ 6750, R = 203% p.a. and T = 3 years.
sum = 100 × SI / R × T
= $ (100 × 6750 × ³/20 × 1/3 ) = $ 33750.
Now, P = $ 33750, R = 203% p.a. and T = 3 years.
Therefore, amount after 3 years
= $ {33750 × (1 + (20/3 × 100)}³ [using A = P (1 + R/100)]
= $ (33750 × 16/15 × 16/15 × 16/15) = $ 40960
Thus, amount = $ 40960
Hence, compound interest = $ (40960 - 33750) = $ 7210
sum = 100 × SI / R × T
= $ (100 × 6750 × ³/20 × 1/3 ) = $ 33750.
Now, P = $ 33750, R = 203% p.a. and T = 3 years.
Therefore, amount after 3 years
= $ {33750 × (1 + (20/3 × 100)}³ [using A = P (1 + R/100)]
= $ (33750 × 16/15 × 16/15 × 16/15) = $ 40960
Thus, amount = $ 40960
Hence, compound interest = $ (40960 - 33750) = $ 7210
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