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What will be the simple to compound interest (compounded annually) ratio on two identical funds put in a bank at an interest rate of 8% (per annum) for three years?
Answer & Solution
Correct Answer:
Option
B
$$8\% = \frac{2}{{25}}$$
$${\text{Simple Interest}} = \frac{{15625 \times 8 \times 3}}{{100}} = 3750$$
\[\begin{array}{*{20}{c}} \Rightarrow &{{\text{Simple Interest}}}&:&{{\text{Compound Interest}}} \\ {}&{3750}&:&{4058} \\ {}&{1875}&:&{2029} \end{array}\]
$${\text{Simple Interest}} = \frac{{15625 \times 8 \times 3}}{{100}} = 3750$$
\[\begin{array}{*{20}{c}} \Rightarrow &{{\text{Simple Interest}}}&:&{{\text{Compound Interest}}} \\ {}&{3750}&:&{4058} \\ {}&{1875}&:&{2029} \end{array}\]
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