Question

A man borrowed Rs.$20,000$ for $2$ years at $8$ % per year compound interest. Calculate the final amount at the end of the second year.

• A. Rs. $23,328$
• B. Rs. $23,521$
• C. Rs. $23,487$
• D. Rs. $23,529$

Answer 1

Answer: (A)

Rs. $23,328$

$\Rightarrow$ We have $P=Rs.20,000,T=2years$ and $R=8\%$.

$\Rightarrow$ $A=P\times {(1+\frac{R}{100})}^T$

$\Rightarrow$ $A=20000\times {(1+\frac{8}{100})}^2$

$\Rightarrow$ $A=20000\times {\left(\frac{22}{20}\right)}^2$

$\Rightarrow$ $A=20000\times \frac{484}{400}$

$\Rightarrow$ $A=Rs.23,328.$

$\therefore$ The final amount at the end of the second year is $Rs.23,328.$