Question

The compound interest on Rs. 8,000 at 10% per annum for 2 years (compounded annually) is:

• A. Rs. 1,680
• B. Rs. 1,600
• C. Rs. 1,760
• D. Rs. 800

Answer 1

The Correct Option is A

Step 1: Amount \(= 8000\left(1+\dfrac{10}{100}\right)^2 = 8000\times1.21 = 9680\).
Step 2: \(CI = 9680 - 8000 = \text{Rs. }1680\).

Quick Tip: \(CI = P\left[(1+\tfrac{R}{100})^T - 1\right]\); subtract the principal at the end.