Question

Calculate the amount and the compound interest on Rs. $12,000$ for $2$ years at $5$% per annum compounded annually.

• A. Rs. $13,500$ and Rs. $1500$
• B. Rs. $13,230$ and Rs. $1,230$
• C. Rs. $14728$ and Rs. $2,728$
• D. None of the above

Answer 1

The correct option is B Rs. $13,230$ and Rs. $1,230$

Amount $A=P(1+r{)}^t$
Here, $P=12000,r=\frac{5}{100}=0.05,t=2$
$\therefore A=12000(1+0.05{)}^2$
$=12000(1.05{)}^2$
$=12000\left(1.1025\right)$
$=13230$
Compound interest$=13230-12000=1230$
Option B is correct.