Question

The C.I. on a certain sum of money for the 4th year at 8% p.a. is Rs. 486. What was the compound interest for the third year on the same sum at the same rate?

• A. Rs. 450
• B. Rs. 475
• C. Rs. 456
• D. None of these

Answer 1

Answer:

A. Rs. 450

Solution: Let the basic amount for the 4th year be ‘x’ ∴ According to the first given condition, ⇒ 486 = x × (1 + 0.08) - x ∴ 0.08x = 486 ∴ x = 6075 ∴ Amount after 3rd year = 6075 Let the base amount for the 3rd year be ‘y’ ∴ 6075 = y × (1 + 0.08) ∴ y = 5625 ∴ C.I for the 3rd year = 6075 - 5625 = 450 ∴ The Compound Interest for the 3rd year is Rs. 450