Multiple choice

A sum of rupees 15000 is lent at 16% p.a. compound interest. What is the difference for the second year and the third year?

  1. $544.54$
  2. $445.44$
  3. $442.45$
  4. $442.55$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Year 2 interest: 15000 × 1.16² - 15000 × 1.16 = 20184 - 17400 = 2784. Year 3 interest: 15000 × 1.16³ - 15000 × 1.16² = 23413.44 - 20184 = 3229.44. Difference: 3229.44 - 2784 = 445.44.