Multiple choice

The compound interest on Rs.3200 for 2 years at (7\frac{1}{2})% per annum is ( in Rs.)

  1. Rs.508

  2. Rs.498

  3. Rs.488

  4. Rs.483
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For compound interest, the amount after 2 years is A = P(1 + r/100)^n = 3200(1 + 7.5/100)^2 = 3200 × 1.075^2 = 3200 × 1.155625 = Rs.3698. The compound interest earned is A - P = Rs.3698 - Rs.3200 = Rs.498.

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