An amount of money grows upto Rs. 4000 in 2 years and up to Rs. 8000 in 3 years on compound interest. What is the sum?a)Rs. 1600b)Rs. 1000c)Rs. 1200d)Rs. 2400e)None of theseCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Solution:
Let the principal be Rs. x.
Given, the principal amount grows up to Rs. 4000 in 2 years and up to Rs. 8000 in 3 years on compound interest.

Calculation:
Using the formula for compound interest,
Amount after 2 years = x(1 + r/100)²
Amount after 3 years = x(1 + r/100)³

Given, amount after 2 years = Rs. 4000 and amount after 3 years = Rs. 8000
So, we have two equations as below:
x(1 + r/100)² = 4000
x(1 + r/100)³ = 8000

Dividing the second equation by the first equation, we get:
(1 + r/100) = 2
r/100 = 1
r = 100

Substituting the value of r in any of the equations above, we get:
x = 1000

Therefore, the sum is Rs. 1000.

Hence, option (b) is the correct answer.

Similar Quant Doubts

A sum of money placed at compound interest doubles itself in 3 years. In how many years will it amount to 8 times itself?

If the difference between compound interest and simple interest on a certain sum of money for 3 years at 10% p.a. (for both simple and compound interest) be Rs.1488 then find that sum in rupee.

Simple interest on a certain sum of money for 4 years at 5% per annum is half the compound interest on Rs. 3000 for 2 years at 10% per annum. The sum placed on simple interest is

A sum of money is lent at simple interest and compound interest. The ratio between the difference of compound interest and simple interest of 3 years and 2 years is 35 : 11. What is the rate of interest per annum?

The difference between the total simple interest and the total compound interest compounded annually at the same rate of interest on a sum of money at the end of two years is Rs. 350. What is definitely the rate of interest per cent per annum?

Top Courses for Quant

Related Content

Quant Courses

Related Exams

Related Question Answers

Related Searches

Company