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The Simple Interest on a Certain Sum of Money for 3 Years at 5% per Annum Is Rs.1,200. Find the Amount and the Compound Interest Due on this Sum of Money at the Same Rate and After 2 Years.

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Question

The simple interest on a certain sum of money for 3 years at 5% per annum is Rs.1,200. Find the amount and the compound interest due on this sum of money at the same rate and after 2 years. Interest is reckoned annually.

Sum
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Solution

Let Rs.X be the sum of money.

Rate = 5 % p.a. Simple interest = Rs.1,200, n = 3 years.

`1,200 = [ "X" xx 5 xx 3 ]/100`

⇒ X = `[ 12,00,000 ]/15`

⇒ X = 8,000

The amount due and the compound interest on this sum of money at the same rate and after 2 years.

P = Rs. 8,000 ; rate = 5% p.a., n = 3 years

∴ A = P`( 1 + r/100 )^n`

⇒ A = 8,000`(1 + 5/100)^2`

⇒ A = 8,000(1.1025)

⇒ A = 8,820

C.I. = A - P

⇒ C.I. = 8,820 - 8,000

⇒ C.I. = 820

The amount due after 2 years is Rs. 8,820 and the compound interest is Rs. 820.

shaalaa.com
Concept of Compound Interest - Use of Compound Interest in Computing Amount Over a Period of 2 Or 3-years
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Chapter 3: Compound Interest (Using Formula) - Exercise 3 (E) [Page 54]

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Selina Concise Mathematics [English] Class 9 ICSE
Chapter 3 Compound Interest (Using Formula)
Exercise 3 (E) | Q 9 | Page 54
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