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 A man gets a simple interest of Rs. 1,000 on a certain principal at the rate of 5 p.c.p.a. in 4 years. What compound interest will the man get on twice the principal in two years at the same rate ?

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 A man gets a simple interest of Rs. 1,000 on a certain principal at the rate of 5 p.c.p.a. in 4 years. What compound interest will the man get on twice the principal in two years at the same rate ?

A). Rs. 1325

B). Rs. 1225

C). Rs. 1125

D). Rs. 1025


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3 vote
Answered by on | Votes 3 |

Rs. 1025



Principal = SI x 100/Time x Rate
= 1000 x 100/4 x 5
= Rs. 5000
Case II
Principal = Rs. 10000
Therefore CI = P [(1 + Rate/100)Time -1]
= 10000 [(1 + 5/100)² -1]
= 10000 x [(21/20)² -1]
= 10000 x 41/400
= Rs. 1025

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