Multiple choice

A person invests Rs 500 at the starts of each year at 5% compound interest per annum. How much will he invest be at the end of 2nd year?

  1. 552.25

  2. 551.52

  3. 551.25

  4. 552.52
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Investing Rs 500 at 5% compound interest for 2 years: Amount = 500 × (1 + 0.05)² = 500 × 1.1025 = 551.25. The compound interest formula A = P(1 + r/100)² gives the final amount. Option A (552.25) incorrectly uses simple interest calculation.

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