Question

The amount of Rs.2000 lent at 10% per annum for 2 years, If the interest is compounded annually is

a) Rs.2420 b) Rs.2210 c) Rs.2100 d) Rs.2200

Answer 1

Answer:

2210 I think option B is right

Answer 2

Rs 2000 = total amount = principal    ( given)

Rate of interest = 10%                           ( given)

First year's interest = 2000 of 10% = 200

Now we have to find out the interest for 2nd year :-

A = P ( 1 + $\frac{r}{100}$)ⁿ

   = 2000 ( 1 + $\frac{10}{100}$ )²- [ 2000 ( 1 + $\frac{10}{100}$ )¹]

   = 200 ( 110/100)² - [ 2000 ( 110/100)

   =2420 -2200

   =220

Hence the interest for 2nd year will be r=Rs220

∴Principal + Interest = Rs(2000 + 200+ 220 )= Rs2420

Ans :- After 2 years the amount will be Rs 2420.

             so the correct option will be   a). Rs2420

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