Question

On an amount, simple interest received at the annual rate of 15 percent for 8 years is Rs. 14400. What will be the compound interest on same amount at the annual rate of 20 percent compounding annually for 2 years ?
1. Rs. 5480
2. Rs. 5570
3. Rs. 5280
4. Rs. 5680

Answer 1

Correct Answer - Option 3 : Rs. 5280

Given 

Simple Interest after 8 years = Rs 14400 

Formula Used 

Simple Interest = Principal × Rate × Time/100

Compound interest = P[(1 + R/100)^t - 1)

Calculation

⇒ 14400 = Principal × 8 × 15/100 

⇒ Principal = 1200 × 100 = Rs 12,000

Compound Interest = 12000[(1 + 20/100)² - 1]

⇒ 12000 × 11/25 = Rs 5280

∴ The required answer is Rs 5280