Question

A sum of Rs. $8,000$ is invested for $3$ years at $10\%$ per annum compound interest. Calculate the interest for the second year.

• A. $440$
• B. $880$
• C. $330$
• D. $800$

Answer 1

The correct option is B $880$

Given, $P=$ Rs. $8,000,R=10\%$.

Interest for second year $=$ $P\times \frac{R}{100}\times (1+\frac{R}{100})$

$=$ $8000\times \frac{10}{100}\times (1+\frac{10}{100})$

$=$ $800\times \frac{11}{10}$

Therefore, interest for second year $=$ Rs. $880.$