Multiple choice

What will be the compound interest accrued on a sum of Rs. 30,000 at the rate of 8% per annum in 2 years?

  1. Rs. 4992

  2. Rs. 5092

  3. Rs. 5062

  4. Rs. 5600

  5. Rs. 6400
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A Correct answer
Explanation

Use compound interest formula: A = P(1 + r)². A = 30,000 × (1.08)² = 30,000 × 1.1664 = 34,992. Compound interest = 34,992 - 30,000 = 4,992. Alternatively, year 1: 30,000 × 0.08 = 2,400 (new principal 32,400); year 2: 32,400 × 0.08 = 2,592; total CI = 2,400 + 2,592 = 4,992.

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