Question

What would be the compound interest accrued on an amount of Rs.7850 at the rate of 14%
per annum in two years?
a) Rs.2351.86 b) Rs.2880.37 c) Rs.2518.22
d) Rs.2290.23 e) None of these

Answer 1

The compound interest accumulation factor :

P(1 + i)ⁿ = Amount

P = deposited amount

i = interest rate

n = duration in years.

Doing the substitution we have :

7850(1.14)² = 10201.86

Interest = 10201.86 - 7850 = 2351.86