Question

The Compound interest on ₹400 for 2 years at 5% p.a compounded annually is:
A. ₹41
B. ₹40
C. ₹20
D. ₹10

Answer 1

Answer:

Principal (P)=Rs.4000

Rate of Interest (r)=10%

Time =2 years and 3 months

Here first we take n=2 years.

⇒ Amount for first 2 years (A)=P(1+

100

r

)

n

=4000(1+

100

10

)

2

=4000(

10

11

)

2

=4000×

100

121

=Rs.4840

⇒ The amount after two years =Rs.4840

⇒ Now, Principal =Rs.4840

Simple interest for last 3 months i.e.

4

1

years =

100

PRT

=

100×4

4840×10×1

=Rs.121

⇒ Amount after 2 years and 3 months =Rs.4840+Rs.121=Rs.4961

⇒ C.I.=A−P

=Rs.4961−Rs.4000

=Rs.961

∴ The compound interest is Rs.961

Answer 2

The Compound interest is ₹41 and option A is correct.

Step-by-step explanation:

Given:

₹400 for 2 years at 5% p.a compounded annually.

To Find:

The value of the Compound interest.

Formula Used:

$CI=Y[(1+\frac{Z}{100} )^{T} -1]$    ------------- formula no. 01.

CI= Compound Interest

Y= represents the original amount or initial amount

Z= the annual interest rate(in percentage)

T= represents the number of years

Solution:

As given,₹400 for 2 years at 5% p.a compounded annually.

Y=Rs.400               T= 2 years         and  Z=5%

pplying formula no.01.

$CI=400[(1+\frac{5}{100} )^{2} -1]$

     $=400[(\frac{105}{100} )^{2} -1]$

     $=400[1.05^{2} -1]$

    $=400[(1.1025 -1]$

     $=400\times0.1025$

     $=Rs.41$

Thus,the Compound interest is ₹41 and option A is correct.

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