Question : The simple interest on a sum of money at 10% per annum for 2 years is 8,100. Compounded annually, what would be the compound interest (in ) on the same sum for the same period at the same rate of interest?
Option 1: 8,100
Option 2: 8,505
Option 3: 8,715
Option 4: 9,000

Question

Question : The simple interest on a sum of money at 10% per annum for 2 years is 8,100. Compounded annually, what would be the compound interest (in ) on the same sum for the same period at the same rate of interest?

Option 1: 8,100

Option 2: 8,505

Option 3: 8,715

Option 4: 9,000

Team Careers360 · Accepted Answer

Correct Answer: 8,505

Solution : Simple interest = $\frac{ ext{Principal × Rate × Time}}{100}$
According to the question
$⇒ 8100 = \frac{ ext{Principal}×10×2}{100}$
$ herefore$ Principal $= 40500$
Now,
$ ext{Total Amount}$
$= ext{Principal}×(1+\frac{ ext{Rate}}{100})^{ ext{Time}}$
$ = 40500({1+ \frac{10}{100})^2}$
$ = 40500({ \frac{11}{10})^2}$
$ = 40500×{ \frac{121}{100}}$
$=49005$
$ herefore$ Compound Interest = Amount – Principal = 49005 – 40500 = 8505
Hence, the correct answer is 8505.

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Question : The simple interest on a sum of money at 10% per annum for 2 years is 8,100. Compounded annually, what would be the compound interest (in ) on the same sum for the same period at the same rate of interest?Option 1: 8,100Option 2: 8,505Option 3: 8,715Option 4: 9,000

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Question : The simple interest on a sum of money at 10% per annum for 2 years is 8,100. Compounded annually, what would be the compound interest (in ) on the same sum for the same period at the same rate of interest?
Option 1: 8,100
Option 2: 8,505
Option 3: 8,715
Option 4: 9,000