Question

The compound interest on $Rs5,000$ at $4\%$ per annum for $2$ years compounded annually will be

• A. $Rs.806$
• B. $Rs.708$
• C. $Rs.5,408$
• D. $Rs.408$

Answer 1

The correct option is D $Rs.408$

Given, $P=5000$

$R=4\%$

$T=2yrs$

for compound interest,

$A=P(1+\frac{R}{100}{)}^T$

$A=5000(1+\frac{4}{100}{)}^2=5000\times (\frac{104}{100}{)}^2=5408$

$CI=A-P=5408-5000=408$

Option $\text{D}$ is correct