If in 3 years at simple interest the principal increases by 18%, what will be the compound interest (in Rs.) earned on Rs. 25,000 in 3 years at the same rate?

4775.4

Let the principal = Rs. 100

Amount becomes Rs. 118 in 3 years

So, S.I. = 18 = \(\frac{100×R×3}{100}\) ⇒ R = 6%

⇒ 6% = \(\frac{3}{50}\)

Therefore, C.I. :

              Principal    :    Amount

1st year      50         :       53

2nd year     50         :       53

3rd year     50         :       53  

Total:     125000      :     148877

C.I. = 148877 - 125000 = 23877

ATQ,

125000R = 25000

1R = 0.2

C.I. = 23877R = 23877 × 0.2 = 4755.4