Multiple choice

The simple interest on a sum at 8% per annum for 8 years is Rs 16000. What will be the compound interest on the same sum at one fourth of the above rate of interest for two years?

  1. 1020

  2. 980

  3. 1010

  4. 1015
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SI equals P times R times T gives P equals 16000 divided by 0.08 times 8 equals 25000. CI at 2 percent for 2 years: 25000 times open bracket 1.02 squared minus 1 close bracket equals 25000 times open bracket 1.0404 minus 1 close bracket equals 25000 times 0.0404 equals 1010.

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