The simple interest on a certain sum of money at 4% per annum for 3 years is 1,200 Taka. The compound interest on the same sum for the same period and at the same rate is -

Question: The simple interest on a certain sum of money at 4% per annum for 3 years is 1,200 Taka. The compound interest on the same sum for the same period and at the same rate is -

Solution:
Given, Simple Interest, I = 1,200 Taka
r = 4% = 0.04
n = 3 years

We know,
I = Pnr
P = I/nr
P = 1200/(3×0.04)
P = 10,000 Taka

For Compound Interest,

So, Compound Interest = 11248.64 - 10000
= 1248.64 Taka
= 1249 Taka