A principal amount increases by 50% in five years at simple interest. At the same rate of interest, what will be the compound interest on ₹20000 for three years?

₹6620

A principal amount increases by 50% in five years at simple interest.

Simple interest per year = \(\frac{50% }{5 }\)  = 10%

With compound interest ,

Amount = Principal × ( 1 + \(\frac{rate }{100 }\) )^t

= 20000 × ( 1 + \(\frac{10 }{100 }\) )³

= 20000 ×  \(\frac{11 }{10 }\) ×  \(\frac{11 }{10 }\) ×  \(\frac{11 }{10 }\)

= Rs. 26620

We know , Amount = Principal + Simple Interest

26620 = 20000 + Compound Interest

Compound Interest = 26620 - 20000

= Rs. 6620