Question

The compound interest on a sum of ₹ 15,000 at 4% per annum for a period of 2 years, compounded annually will be equal to

• A. ₹ 1324
• B. ₹ 1248
• C. ₹ 1372
• D. ₹ 1224

Answer 1

The correct option is D

₹ 1224

Using the formula A = P${(1+\frac{r}{100})}^n$ and substituting P = ₹ 15,000 , t = 2 years , r = 4 p.a , we have

$A$ = $₹15,000\times (1+\frac{4}{100}{)}^2=₹15,000\times \frac{26}{25}\times \frac{26}{25}=₹16,224$.

C.I = A - P
$\therefore C.I.=₹16,224-15,000=₹1224$.