The simple interest accrued on an amount of Rs. 16,500 at the end of three years is Rs. 5,940. What would be the compound interest accrued…

Solution
Principal amount = Rs. 16,500
Simple interest earned = Rs. 5,940 and time = 3 years
Let rate of interest = $R \%$
=> $S.I. = \frac{P \times R \times T}{100}$
=> $5940 = \frac{16500 \times R \times 3}{100}$

=> $R = \frac{5940}{165 \times 3}$
=> $R = 12 \%$
Now, compound interest accrued on the same amount at the same rate in the same period = $P [(1 + \frac{R}{100})^T - 1]$
= $16,500 [(1 + \frac{12}{100})^3 - 1]$
= $16,500 [(\frac{28}{25})^3 - 1] = 16,500 (\frac{21952 - 15625}{15625})$
= $16,500 \times \frac{6327}{15625} = Rs. 6681.31$