Multiple choice

What is the compound interest on Rs. 48,000 for 2 years at 20% p.a. if interest is compounded annually?

  1. Rs. 69,120

  2. Rs. 21,120

  3. Rs. 76,800

  4. Rs. 72,000

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest = P * ((1 + r/100)^n - 1). For P = 48000, r = 20, n = 2: 48000 * ((1.2)^2 - 1) = 48000 * (1.44 - 1) = 48000 * 0.44 = 21120.

AI explanation

The formula for compound interest is CI = P * ((1 + R / 100)^T - 1). Substituting the given values gives CI = 48000 * ((1 + 20 / 100)^2 - 1), which equals 48000 * (1.44 - 1). The compound interest earned is 48000 * 0.44 = Rs. 21,120.

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