Multiple choice

The compound interest for two years of Rs. 7500 at the rate of 8% per annum would be

  1. Rs. 1248

  2. Rs. 1260

  3. Rs. 1300

  4. Rs. 1352
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A Correct answer
Explanation

CI = P * ((1 + r/100)^n - 1) = 7500 * ((1.08)^2 - 1) = 7500 * (1.1664 - 1) = 7500 * 0.1664 = 1248.

AI explanation

For two years, the compound interest formula can be written as Interest = P * [ (R/100) + (R/100)^2 ]. Substituting the values gives 7500 * [ 0.08 + 0.0064 ] = 7500 * 0.0864. Multiplying these gives 648 + 600, resulting in Rs. 1248.

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