Question

What would be the compound interest obtained on an amount of Rs.12,500 at the rate of 12 p.c.p.a after 2 years?

• A. Rs. 3,180
• B. Rs. 3,360
• C. Rs. 3,540
• D. Rs. 3,720

Answer 1

The correct option is A

Rs. 3,180

$CI=P[{(1+\frac{R}{100})}^t-1]=12500[{(1+\frac{12}{100})}^2-1]=12500[{(1+\frac{3}{25})}^2-1]$

$=12500[{\left(\frac{25+3}{25}\right)}^2-1]=12500[{\left(\frac{28}{25}\right)}^2-1]=12500[\frac{784}{625}-1]=12500\left[\frac{784-625}{625}\right]$

$=12500\times \frac{159}{625}=20\times 159=Rs.3180$