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### Question

When a certain amount is invested in a simple interest scheme, it increases by 30% in 3 years. What will be compound interest after 3 years on an amount of Rs. 8000, at the same interest rate, and annual compounding?

**A**

Rs. 2648.

**B**

Rs. 2748.

**C**

Rs. 2548.

**D**

Rs. 2848.

**Soln.**

**Ans: a**

Simple interest on Rs. 100 in 3 years is Rs. 30, so rate is 30/3 = 10%. Compound interest for 3 years would be 8000 × $(1 + 10/100)^3$ = 8000 × $(11/10)^3$ = $(8000 × 11 × 11 × 11)/1000$ = Rs. 10648. Interest = A - P = 10648 - 8000 = Rs. 2648.