Multiple Choice Questions on Ram invested 45 of his salary in a scheme for 3 years which offers 10 per annum compound interest co........... for SSC (MTS) Preparation

Compound Interest

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    Ram invested 45% of his salary in a scheme for 3 years which offers 10% per annum compound interest, compounded annually.

    If he receives Rs5,958 as total interest, then find Ram's salary?

    This questions was previously asked in
    SSC MTS 14th July 2022 Shift-3

    Rs45,000

    Incorrect Answer

    Rs50,000

    Incorrect Answer

    Rs36,000

    Incorrect Answer

    Rs40,000

    Correct Answer
    Explanation:

    - Ram invested 45% of his salary at 10% compound interest over three years.

    - The total interest received from this investment is Rs5,958.

    - The formula for compound interest is A = P(1 + r/n)^(nt), where A is the amount, P is the principal, r is the rate, n is the number of times interest is compounded per year, and t is the time in years.

    - Here, interest is compounded annually (n = 1), so the formula simplifies, and we focus on interest gained.

    - To find Ram's salary, we first need to calculate his initial investment (P) that resulted in Rs5,958 in interest.

    - Let's denote Ram's salary as S. Thus, the investment P = 0.45 * S.

    - Using the compound interest formula, 5,958 = P * [(1 + 0.10)^3 - 1].

    - Calculate: [(1 + 0.10)^3 - 1] = [1.1^3 - 1] = [1.331 - 1] = 0.331.

    - Now, 5,958 = 0.331 * (0.45 * S).

    - Solving for S, 5,958 = 0.14895 * S, S = 5,958 / 0.14895 ˜ Rs40,000.

    Option:4 - Rs40,000


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