Multiple choice

An industrialist borrowed the $Rs\ 75,000$ for two years at the rate $2.5\%$ p.a.compounded annually. Calculate the total amount compound interest by simple interest method.

  1. $2750$
  2. $3750$
  3. $78,795$
  4. $78,796.87$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The question asks for the compound interest amount but mentions the simple interest method, which is contradictory. Calculating compound interest for 75,000 at 2.5% for 2 years: 75,000 * (1 + 0.025)^2 = 75,000 * 1.050625 = 78,796.875.

AI explanation

Using the compound interest formula, Amount equals Principal multiplied by the quantity of 1 plus Rate divided by 100 raised to the time. The calculation is 75,000 multiplied by 1.025 raised to the power of 2. This yields a total amount of approximately 78,796.87.

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