Multiple choice

What would be the compound interest obtained on an amount of Rs. 1500 at the rate of 8 percent per annum after 2 years ?

  1. Rs. 251.60

  2. Rs. 249.60

  3. Rs. 248.60

  4. Rs. 252.60

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

Principal = Rs 1500, rate = 8%, time = 2 years. CI = P(1 + r/100)^t - P = 1500(1 + 8/100)^2 - 1500 = 1500(1.08)^2 - 1500 = 1500(1.1664) - 1500 = 1749.60 - 1500 = Rs 249.60. Alternatively: 1st year interest = 1500 × 0.08 = 120, 2nd year interest = (1500 + 120) × 0.08 = 1620 × 0.08 = 129.60. Total CI = 120 + 129.60 = 249.60.

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