Question

A sum of Rs. $13,500$ is invested at $16\%$ per annum compound interest for $5$ years. Calculate the interest for the second year, correct to the nearest rupee.

• A. Rs. 2,106
• B. Rs. 2,279
• C. Rs. 2,506
• D. Rs. 2,792

Answer 1

The correct option is C Rs. 2,506

Sum=Rs 13,500

Rate=16%

Amount at the end of first year$=P{(1+\frac{R}{100})}^T$

$\Rightarrow 13500(1+\frac{16}{100})$

$\Rightarrow 13500\times \frac{116}{100}=Rs.15,660$

For the second year

Sum $=Rs15,660$

Then amount after second year$=15660(1+\frac{16}{100})$

$\Rightarrow 15,660\times \frac{116}{100}=Rs.18165.6$

$\therefore$ Interest for second year $=18,165.6-15,660$

$=Rs2505.6$

Rounding off $Rs2505.6$ we get $Rs2,506$

Therefore interest for the second year is $Rs2,506$