Question

A man invests ₹ 46,875 at 4 % per annum compound interest for 3 years. Calculate :

(i) the interest for the 1st year

(ii) the amount standing to his credit at the end of 2nd year:

• A. Rs 4000
• B. Rs 2000
• C. Rs 1000
• D. Rs 500

Answer 1

The correct option is B

Rs 2000

P = ₹ 46,875 R = 4 % and T = 1 year

(i) I = $\frac{46,875\times 4\times 1}{100}$
= ₹ 1875
(ii)
For the 2nd year
P = ₹ 46,875 + 1875
= ₹ 48,750

I = $\frac{48,750\times 4\times 1}{100}$
= ₹ 1950

Amount at the end of second year = ₹ 48750 + 1950
= ₹ 50,700