Multiple choice

Manisha invests an amount of Rs. 39,300 for 2 years at the rate of 4 pcpa. What approximate amount of compound interest will she obtain at the end of 2 years?

  1. Rs. 6675

  2. Rs. 6650

  3. Rs. 5288

  4. Rs. 3207

  5. Rs. 4650
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Compound interest for 2 years at 4% p.a. is calculated as P * ((1 + r/100)^n - 1). For P = 39,300, r = 4, n = 2: CI = 39,300 * ((1.04)^2 - 1) = 39,300 * (1.0816 - 1) = 39,300 * 0.0816 = 3206.88, which rounds to 3207.

AI explanation

Using the formula for compound interest, we calculate the amount as 39300 multiplied by 1.04 raised to the power of 2, which gives 42507.52. The compound interest is then found by subtracting the principal from this amount, yielding 42507.52 minus 39300. The approximate compound interest obtained at the end of 2 years is Rs. 3207.

Keep practicing — related questions