Multiple choice Compound interest on Rs. 1200 for 2 years at 5% is- Rs. 125 Rs. 130 Rs. 120 Rs. 123 Reveal answer Fill a bubble to check yourself D Correct answer Explanation Compound interest formula: A = P(1 + r/100)^n. Here P = 1200, r = 5, n = 2. A = 1200(1.05)² = 1200 × 1.1025 = 1323. Compound interest = A - P = 1323 - 1200 = Rs. 123. Option A (Rs. 125) would be simple interest for 2 years at 5%.