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SSC CGL Model Paper 4

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Question : 60 of 100

Marks: +1, -0

If in 3 years at simple interest the principal increases by 18%, what w ill be the compound interest (in ₹) earned on ₹ 25000 in 3 years at the same rate?

4775.4
5774.4
4557.4
5575.4

Solution:

Let principal amount = ₹ x

Time = 3 years

Simple interest

= x \times \frac{18}{100} = \frac{18x}{100}

Simple interest =

\frac{P \times R \times T}{100}

R = \frac{\text{Simple interest} \times 100}{P \times T}

= \frac{\frac{18x}{100} + 100}{x \times 3} = 6\%

Compound interest

= P\left[\left(1+\frac{r}{100}\right)^n - 1\right]

= 25000\left[\left(1+\frac{6}{100}\right)^3 - 1\right]

= 25000\left[\left(\frac{53}{50}\right)^3 - 1\right]

= 25000\left[\frac{(53)^3 - (50)^3}{(50)^3}\right]

= \frac{25000 (53 - 50) (53^2 + 50^2 + 53 \times 50)}{50 \times 50 \times 50}

= \frac{25000(3)(2809 + 2500 + 2650)}{50 \times 50 \times 50}

= \frac{25000 \times 3 \times 7959}{50 \times 50 \times 50}

= ₹ 4775.4

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