The simple interest accrued on a certain principal is Rs. 1200 in 3 years at the rate of 8% per annum. What would be the compound interest (compounding annually) accrued on twice of that principal at the rate of 10% per annum in 2 years ?
Answer & explanation
Correct answer: option 3
Principal(P)=?
Time(T)= 3 years
Rate = 8 %
Simple Interest (S.I.) = 1200
If P=100
I=R×T
I=8×3
I=24%
ATQ
24%=1200
1%=50
100%=5000 Rs
If principal is twice i.e. 5000×2= Rs 10000
R=10%
T=2 years
Compound Interest for 2 years = R+R+\(\frac{R×R}{100}\)
= 10+10+\(\frac{10×10}{100}\)
= 21%
Interest = 21% of Principal
= \(\frac{21}{100}\)×10000
=2100 Rs