Multiple choice

What is the compound interest on Rs. 1600 at 25% per annum for 2 years compounded annually?

  1. Rs. 700

  2. Rs. 750

  3. Rs. 800

  4. Rs. 900
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Principal P = Rs. 1600, Rate R = 25%, Time n = 2 years. Amount = P(1 + R/100)^n = 1600(1 + 25/100)^2 = 1600(1.25)^2 = 1600 × 1.5625 = Rs. 2500. Compound Interest = Amount - Principal = 2500 - 1600 = Rs. 900.

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