Question

Rekha borrowed ₹ 40000 for 3 years at 10% per annum compound interest. Calculate the interest paid by her for the second year.

• A. ₹ 4000
• B. ₹ 4800
• C. ₹ 4400
• D. ₹ 4200

Answer 1

The correct option is C

₹ 4400

For 1st year
Principal = ₹ 40000, Rate =10%, Time =1 year
$\therefore$ Interest= $\frac{40000\times 10\times 1}{100}=400\times 10=₹4000$
$\therefore$ Amount at the end of 1st year= ₹ (40000+4000)=₹ 44000
For 2nd year
P= ₹ 44000,R= 10%, T= 1 year
$\therefore$ Interest= ₹ $\frac{44000\times 10\times 1}{100}=440\times 10=₹4400$
Thus interest paid in the second year=₹ 4400