Question

The compound interest on ₹ 50,000 at 4% per annum for 2 years compounded annually is₹ 4,280₹ 4,050₹ 4,000₹ 4,080

Solution

The correct option is D ₹ 4,080Given, principal (P) = ₹ 50000 Rate of interest (R) = 4% per annum Time period (T) = 2 yrs We know that amount, A=P(1+R100)T ∴A=50000(1+4100)2 =50000(1+125)2=50000×2625×2625=54080 ∴ Compound interest, CI = A - P = ₹ 54080 - ₹ 50000 = ₹ 4080

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