Question

Find compound interest on ₹ 10,000 at 15$\%$ per annum for 2 years 4 months, compounded annually.

• A. ₹ 4025.25
• B. ₹ 3886.25
• C. ₹ 3286.25
• D. ₹ 3426.25

Answer 1

The correct option is B

₹ 3886.25

$Time=2years4months$ = $2\left(\frac{4}{12}\right)years=2\frac{1}{3}years$

It is compounded annually so first we will calculate amount for 2 years using A = $P\times (1+\frac{R}{100}{)}^n$

$Amount=₹[10,000\times (1+\frac{15}{100}{)}^2$ = ₹ $10,000[\frac{23}{20}\times \frac{23}{20}]$ = 13,225
Now interest on this for 4 months ($\frac{1}{3}$ years ) will be equal to

I = $\frac{13,225\times 15}{3\times 100}$ = ₹ 661.25

Final amount = ₹ 13,225 + ₹ 661.25 = ₹ 13886.25

Compound interest = ₹ 13886.25 - ₹ 10,000 = ₹ 3886.25