Question

Find the compound interest earned on a sum of ₹400 in 2 years at the rate of 25% p.a.

• A. 225

Answer 1

The correct option is A 225
$\text{Given:}P=₹400,T=2\text{years,}$ R = 25%

We know that,
$A=P(1+\frac{R}{100}{)}^n$

On substituting the values, we get,
$A=₹400\times (1+\frac{25}{100}{)}^2=₹400\times (\frac{5}{4}{)}^2=₹400\times \frac{25}{16}=₹625$

$\text{Also,}C.I=A-PC.I=₹625-₹400C.I=₹225$