Question

An amount under simple interest fetches an interest 6 times of itself in 40 years. The same rate of interest is applied on an amount of Rs. 71890 for two years under compound interest. Find the interest (in Rs.) it will fetch.
1. 23184.525
2. 28184.525
3. 21184.525
4. 26184.525

Answer 1

Correct Answer - Option 1 : 23184.525

Given:

An amount under simple interest fetches an interest 6 times of itself in 40 years.

The same rate of interest is applied on an amount of Rs. 71890 for two years under compound interest.

Formula Used:

Amount after n years under compound interest = p × (1 + r/100)ⁿ

Compound Interest = p × [1 + (r/100)]ⁿ – p [Where p is Principal, r is interest rate, n is time period]

Calculation:

Let the sum be x.

And Interest = 6x

S I = (p × r × t)/100

⇒ 6x = (x × r × 40)/100

⇒ r = 15

For second case,

Interest = Rs. [71890 × (1 + 15/100)² – 71890] = Rs. [95074.525 – 71890] = Rs. 23184.525

∴ The interest is Rs. 23184.525