There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?
Let’s denote the principal amount as P and the rate of interest as R.
Simple Interest (SI) for 6 years:
SI = (P × R × Time) / 100
= (P × R × 6) / 100
Given that the SI is 60% of the principal amount (P):
(P × R × 6) / 100 = 0.6P
Multiply both sides by 100 and divide by 6P:
R = (0.6 × 100) / 6
R = 10
Now, let’s find the compound interest (CI) for Rs. 12,000 after 3 years at 10% per annum:
CI = P × (1 + R/100)^Time – P
= 12000 × (1 + 10/100)^3 – 12000
= 12000 × (1.1)^3 – 12000
= 12000 × 1.331 – 12000
= 15972 – 12000
= 3972
The compound interest is Rs. 3972.