Question

A man invests Rs. $12500$ at $2\%$ per annum compound interest for $3$ years. Calculate the interest for the $1st$ year.

• A. $550$
• B. $650$
• C. $750$
• D. $850$

Answer 1

The correct option is C $750$

Given,

Principle, $p=12500$
Rate of compound interest, $r=2$%
Time, $t=3$
We have to calculate compound interest for 1 year,

$\therefore t=1$

Compound interest, $ci=A-p$ $(\because A=$amount after t year)
$ci=p(1+\frac{r}{100}{)}^t-p$

Put the values of $p,r,$and $t$ in the above equation and get the value of compound interest, $ci$

$ci=12500(1+\frac{2}{100}{)}^1-12500$

$=12500(\frac{102}{100}{)}^{-}12500$

$=125\times 102-12500$

$=12750-12500$

$=750$ Rs