Question

Mari deposited Rs. $20000$ in a savings bank account. She would be paid interest at $12\%$ per annum compounded annually. Find the interest to her credit at the end of second year.

• A. $1088$
• B. $3088$
• C. $5088$
• D. $7088$

Answer 1

Answer: (C)

$5088$

Given, $P=$ Rs. $20000$, $r=12\%$, $n=1$, $t=2$ years
$A=$ $P{(1+\frac{r}{n})}^{nt}$
$A=$ $20000\times (1+0.12{)}^{1\times 2}$
$A=20000\times 1.2544$
$A=Rs.25088$
Amount $=$ Principal $+$ Interest
Interest $=A-P$
$=25088-20000$
$=$ Rs. $5088$