Question

The compound interest on Rs. 10000 at 4% per annum for two years compounded annually is

A. Rs.1000
B. Rs. 816
C. Rs. 628
D. Rs. 681
​

Answer 1

10,000 in 2 years at 4% per annum, the interest being compounded half-yearly. Explanation: Principal = Rs. 10000; Rate = 2% per half-year; Time = 2 years = 4 half-years.

Answer 2

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Given :

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• Principal = 10000
• Rate = 4% p.a.
• Time = 2 years

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To Find:

⠀⠀⠀⠀⠀⠀⠀⠀

• Compound Interest

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Formula :

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$\bf \large \: p[(1 + \frac{r}{100} ) {}^{n} - 1]$

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

n = number of times interest applied per time periodt = number of time periods elapsed

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Solution :

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P = 10000

R = 4% p.a.

N = 2 years

$\bf \: C.I. = \: p[(1 + \frac{r}{100} ) {}^{n} - 1]$

$\bf \: C.I. = 10000[(1 + \frac{4}{100} ) {}^{2} - 1]$

$\bf \: C.I. = 10000[(\frac{4 + 100}{100} ) {}^{2} - 1]$

$\bf \: C.I. = 10000[(\frac{104}{100} ) {}^{2} - 1]$

$\bf \: C.I. = 10000[\frac{10816}{10000} - 1]$

$\bf \: C.I. = 10000[\frac{10816 - 10000}{10000} ]$

$\bf \: C.I. = 10000[\frac{816}{10000} ]$

$\bf \: C.I. = 10000 \times \frac{816}{10000}$

$\bf \: C.I. = 816$

Therefore C.I = 816