The difference between the compound interest, compounded annually and simple interest on Rs. ‘P’ at the rate of 15% p.a. for 2 years, is Rs. 90. If Rs. (P + 2000) is invested at the same rate p.a., then find the compound interest, compounded annually earned after 3 years.
Using formula Difference = Sum(R/100)2 Or, 90 = P(15/100)2 Or, 90 = P(225/10000) Or, 0.0225P = 90 Or, P = 4000 Sum that is invested on compound interest = 4000 + 2000 = Rs. 6000 Compound interest = 6000 [1 + (15/100)3 ] – 6000 = 6000 × (23/20) × (23/20) × (23/20) – 6000 = 9125.25 – 6000 = Rs. 3125.25
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