Question

What is the compound interest on a sum of Rs 6000 for a time period of 2 years at 10% per year?

• A. Rs 1346
• B. Rs 1260
• C. Rs 2765
• D. Rs 1643

Answer 1

The correct option is B

Rs 1260

: Given, principal (P) = Rs 6000, rate (R) = 10% and n = 2 years

We know that,

A=P${\left(\frac{1+R}{100}\right)}^n$

=6000${\left(\frac{1+10}{100}\right)}^2$

=6000${\left(\frac{1+1}{10}\right)}^2$

=6000${\left(\frac{11}{10}\right)}^2$

=6000$\times$ $\frac{11}{10}$ $\times$ $\frac{11}{10}$

= Rs 7260

Compound Interest = Amount − Principal

= 7260 − 6000

= 1260

Hence, the compound interest is Rs 1260.