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The compound ...

Question

The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually in rupees is

4,000

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4,080

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4,280

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4,050

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Solution

The correct option is B 4,080
Given, P = Rs. 50000, R = 4%, T = 2 years
$A = P (1 + \frac{R}{100})^{T} = 50000 (1 + \frac{4}{100})^{2} = 50000 (\frac{26}{25})^{2} = 54080$
Compound interest = A - P = 54080 - 50000 = 4080

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