Multiple choice

What will be compound interest obtained on an amount of Rs.64000 at the rate of 11 p.c.p.a. after 2 years?

  1. Rs.14854.4

  2. Rs.15854.4

  3. Rs.16854.4

  4. Rs.15844.4

  5. Rs.14844.4
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A Correct answer
Explanation

Compound Interest formula: A = P(1 + r/100)^n. Here P = 64000, r = 11%, n = 2. Amount after 2 years = 64000 × (1.11)² = 64000 × 1.2321 = 78854.4. Compound Interest = Amount - Principal = 78854.4 - 64000 = 14854.4. Alternatively, year 1: 64000 × 0.11 = 7040, new principal = 71040. Year 2: 71040 × 0.11 = 7814.4. Total CI = 7040 + 7814.4 = 14854.4.

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