Question

there is 60% increase in an amount in 6 years at simple interest. then the compound interest of 12000 after 3 years at the same rate is ________

Answer 1

The compound interest on $12,000 after 3 years at an annual rate of 10% (derived from a 60% increase over 6 years with simple interest) is $3,972.

Step-by-step explanation:

Firstly, to calculate the compound interest on a certain amount at a given rate and time when the increase with simple interest is known, we need to first determine the annual rate of interest.

If an amount has increased by 60% over 6 years with simple interest, then the annual simple interest rate is 60% / 6 = 10%. Now, using this rate, we can calculate the compound interest of $12,000 after 3 years.

To calculate compound interest, we use the formula Compound Amount = Principal * (1 + Rate/100)^Time. So for a principal of $12,000, a rate of 10%, and a time of 3 years:

• Compound Amount = $12,000 * (1 + 10/100)^3 = $12,000 * 1.1^3
• Compound Amount = $12,000 * 1.331 = $15,972
• Compound Interest = Compound Amount - Principal = $15,972 - $12,000 = $3,972

Therefore, the compound interest of $12,000 after 3 years at the same rate is $3,972.