If the compound interest in the third year at 8% p.a. on certain sum is ₹3600, then what is the difference between the compound interest in the 4th and 5th year? (nearest to an integer in ₹)
Answer & explanation
Correct answer: option 4
Compound interest on a certain sum in 3rd year is = Rs. 3600
Rate of Interest = 8%
Compound interest on a certain sum in 4th year is = 3600 + 3600 × \(\frac{8}{100}\)
= 3600 + 3600 × \(\frac{2}{25}\)
= 3600 + 288
= 3888
Compound interest on a certain sum in 5th year is = 3888 + 3888 × \(\frac{8}{100}\)
= 3888 + 3888 × \(\frac{8}{100}\)
= 3888 + 3888 × \(\frac{2}{25}\)
= 3888 + 311.04
= 4199.04
So, Required difference b/w compound interest of a certain sum of 4th and 5th year
= 4199.04 - 3888
= 311.04
= 311 ( nearest integer )