Test: Compound Interest- 2 - UPSC MCQ

P [1 + (r/100)]ⁿ  >  2P
⇒ P [1 + (20/100)]ⁿ  >  2P
[1 + (2/10) ]ⁿ  > 2
[12 / 10]n  > 2
[6/5]n  > 2
{6/5 * 6/5 * 6/5 * 6/5}  >  2
∴ n = 4
 

C.I = P[(1 + r/100)n - 1]
C.I = 3000[(1 + 0.10)2 - 1]
= 3000(1.21 - 1)
⇒ 3000 * 0.21 
⇒ 630
S.I = 630/2
⇒ 315
As we know that, P = (SI * 100)/(R * T)
⇒ (315 * 100)/(4 * 5)
⇒ 1575

Let the sum be Rs. P

Compound interest = Amount -Principal
Amount = P(1 + R/100)^N 
882 = P(1+5/100)2
=  882 × 20/21 × 20/21 
P = 800
 

Let's calculate the compound interest step-by-step:

Step 1: Convert the rate of interest to a decimal:

• 6 1/4% = 6.25% = 0.0625

Step 2: Convert the time period to years:

• 2 years and 73 days = 2 + (73/365) years = 2.2 years

Step 3: Calculate the amount using the compound interest formula:

• Amount = Principal * (1 + Rate/100)^Time
• Amount = 20480 * (1 + 0.0625)^2.2
• Amount ≈ 23409

Step 4: Calculate the compound interest:

• Compound Interest = Amount - Principal
• Compound Interest = 23409 - 20480
• Compound Interest = 2929

Therefore, the compound interest on Rs. 20,480 at 6 1/4% per annum for 2 years and 73 days is Rs. 2929.

So, the correct answer is option A: Rs. 2929.