Question : What will be the compound interest accrued on a sum of Rs. 64,000 at the rate of 5% per annum in 2 years compounded annually?

Option 1: Rs. 8550

Option 2: Rs. 4580

Option 3: Rs. 3050

Option 4: Rs. 6560


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Rs. 6560


Solution : Principal, $P$ = Rs. 64,000
Rate of interest, $R$ = 5%
Time, $T$ = 2 years
Total amount = $P(1+\frac{R}{100})^{T}$
⇒ Total amount = $64000(1+\frac{5}{100})^2$
⇒ Total amount = $64000(\frac{21}{20})^2$
⇒ Total amount = $64000×\frac{21}{20}×\frac{21}{20}$
⇒ Total amount = $70560$
Compound interest = Total amount – Principal = 70560 – 64000 = Rs. 6560
Hence, the correct answer is Rs. 6560.

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