There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of Tk. 12,000 after 3 years at the same rate?

Question: There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of Tk. 12,000 after 3 years at the same rate?

Solution:
Let P = Tk. 100.
Then, S.I. Tk. = 60 and n = 6 years

Rate = (100 × 60)/(100 × 6) = 10%

Now, P = Tk. 12000
n = 3 years and R = 10% p.a.

C.I. = P (1 + r)ⁿ - P
= 12000{1 + (10/100)}³ - 12000
= 12000 (11/10)³ - 12000
= (12000 × 11/10 × 11/10 × 11/10) - 12000
= 15972 - 12000
= Tk. 3972

∴ Compound interest Tk. 3972.