Question

The compound interest on a sum of ₹ 7500 at 4% per annum for a period of 2 years, compounded annually will be equal to

• A. Rs.641
• B. Rs.612
• C. Rs.650
• D. Rs.720

Answer 1

The correct option is B

Rs.612

Using the formula A = P${(1+\frac{r}{100})}^n$ and substituting P = ₹ 7500 , t = 2 years , r = 4 p.a , we have

$A$ = $₹7500\times (1+\frac{4}{100}{)}^2=₹7500\times \frac{26}{25}\times \frac{26}{25}=₹8112$.

C.I = A - P
$\therefore C.I.=₹8112-7500=₹612$.