Multiple choice

A sum of Rs 18000 is lent at 15 % per annum compound interest . What is the difference between the compound interest for the second year and the third year ?

  1. 570.75

  2. 465.75

  3. 407.75

  4. 870.75
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For CI, the amount after n years is P(1 + r/100)^n. After 1 year: 18000 × 1.15 = 20700. After 2 years: 18000 × 1.15² = 23805. After 3 years: 18000 × 1.15³ = 27375.75. CI for 2nd year = 23805 - 20700 = 3105. CI for 3rd year = 27375.75 - 23805 = 3570.75. Difference = 3570.75 - 3105 = 465.75.

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