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    Simple interest on a certain sum of money at the rate of 5% per annum for 4 years is Rs. 800. What will be the compound interest on the same sum for t
    Question



    Simple interest on a certain sum of money at the rate of 5% per annum for 4 years is Rs. 800. What will be the compound interest on the same sum for the same period and at the same rate of interest?

    A.

    850

    B.

    840

    C.

    855

    D.

    862

    Correct option is D

    Given
    Rate = 5%, Time = 4 years and Simple interest = 800
    SI = P × R × T/100
    Where, P = principal
    R = rate,T = time
    CI = P( 1 + r/100)n - P
    Where, P = principal, n = time
    Let the principal be P.
    SI = (P × R × T)/100
    800 = (P × 5 × 4)/100
    P = 4000
    CI = 4000( 1 + 5/100)4 - 4000
    CI = 4000 × (105/100)4 - 4000
    CI = (4000 × 21/20 × 21/20 × 21/20 × 21/20) - 4000
    CI = 4862.025 - 4000
    C.I = 862.025 ≈ Rs. 862

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