A sum of money becomes ₹20070 after 3 year and ₹30105 after 6 years on compound interest. The sum will be
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 13380
Under compound interest the amount is multiplied by the same factor \((1+r)^3\) in every 3 years. The growth from year 3 to year 6 therefore gives the factor, and dividing the 3-year amount by it gives the sum.
Factor for 3 years: \((1+r)^3=\displaystyle\frac{30105}{20070}=1.5\)
Sum \(\times1.5=20070\), so the sum \(=20070\div1.5=\) ₹13380