Multiple choice

$A$ borrowed Rs. $2,500$ from $B$ at $12$% per annum compound interest. After $2$ years, $A$ gave Rs. $2,936$ and a watch to $B$ to clear the account. Find the cost of the watch.

  1. Rs. $100$
  2. Rs. $200$
  3. Rs. $300$
  4. Rs. $400$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound amount = 2500 * (1 + 12/100)^2 = 2500 * 1.12^2 = 2500 * 1.2544 = 3136. A paid 2936 + watch = 3136. Watch = 3136 - 2936 = 200.

AI explanation

Using the compound interest formula, the total amount due after 2 years is 2500 times (1 plus 12 divided by 100) raised to the power of 2, which equals 2500 times 1.2544 or Rs. 3136. A returned Rs. 2936 in cash, so the cost of the watch is the remaining balance of 3136 minus 2936, resulting in Rs. 200.

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