There is 75% increase in an amount in 5 years at simple interest. What will be the compound interest of TK. 16,000 after 2 years at the same rate?

Question: There is 75% increase in an amount in 5 years at simple interest. What will be the compound interest of TK. 16,000 after 2 years at the same rate?

Solution:
Let,
P = Tk. 100
Then, S.I = Tk. 75
and n = 5 years

So the rate r = (100 × 75)/(100 × 5)
= 15%

Now, P = Tk. 16,000
n = 2 years
r = 15% p.a.
= 3/20 p.a

C.I = 16,000 × {(1 + 3/20)² - 1}
= 16,000 × {(23/20)² - 1}
= 16,000 × (529/400 - 1)
= 16000 × 129/400
= 5,160