Question

Mark (✓) against the correct answer:
The compound interest on Rs 5000 at 10% per annum for 2 years is
(a) Rs 550
(b) Rs 1050
(c) Rs 950
(d) Rs 825

Answer 1

(b) Rs. 1050

$$\begin{gathered} P=\mathrm{Rs}.5000 \\ R=10\% \\ n=2\mathrm{years} \\ \mathrm{Now},A=\mathrm{Rs}.\mathit{}P\times {\left(1+\frac{R}{100}\right)}^n \\ =\mathrm{Rs}.5000\times {\left(1+\frac{10}{100}\right)}^2 \\ =\mathrm{Rs}.5000\times {\left(\frac{110}{100}\right)}^2 \\ =\mathrm{Rs}.5000\times \left(\frac{11}{10}\right)\times \left(\frac{11}{10}\right) \\ =\mathrm{Rs}.\left(50\times 11\times 11\right) \\ =\mathrm{Rs}.6050 \\ \therefore \mathrm{CI}=A-P=\mathrm{Rs}.(6050-5000)=\mathrm{Rs}.1050 \end{gathered}$$