An amount increases by 60% in 6 years under simple interest. What will be the compound interest on Rs. 12,000 after 3 years at the same interest rate?

Explanation

Assuming the principal is Rs. 100, the simple interest earned in 6 years is Rs. 60. Therefore, the annual interest rate is (60/6) = 10% per annum. For a principal of Rs. 12,000 over 3 years at 10% compound interest, the interest is calculated as: CI = 12000 * [(1 + 10/100)^3 - 1] = 12000 * (1.331 - 1) = 12000 * 0.331 = Rs. 3972.