Question

Find the amount and compound interest on ₹ 1600 for 2 years at the rate of 5% per annum.

• A. (i) ₹ 1764 (ii) ₹ 164
• B. (i) ₹ 1674 (ii) ₹ 174
• C. (i) ₹ 1774 (ii) ₹ 104
• D. (i) ₹ 1467 (ii) ₹ 184

Answer 1

The correct option is A

(i) ₹ 1764 (ii) ₹ 164

P = ₹ 1600, r = 5% and n = 2 years

$A=P(1+\frac{r}{100}{)}^n$

$A=1600(1+\frac{5}{100}{)}^2$

$=1600(\frac{105}{100}{)}^2$

$=1600\left(\frac{441}{100}\right)$

$=₹1764$

We know, I = A - P
So, I = ₹ 1764 - ₹ 1600
= ₹ 164