Multiple choice

The compound interest on Rs 4000 at 10% per annum for 2 years 3 months, compounded annually is

  1. Rs$916$
  2. Rs $900$
  3. Rs $961$
  4. Rs$896$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest for 2 years = 4000 * ((1.1)^2 - 1) = 4000 * 0.21 = 840. For the remaining 3 months (1/4 year), interest is on the new principal 4840 at 10% rate: 4840 * 0.1 * 0.25 = 121. Total = 840 + 121 = 961.

AI explanation

First, calculate the amount after 2 years using the compound interest formula A = 4000 × (1 + 10/100)^2, which equals Rs. 4840. Then, calculate the simple interest on this amount for the remaining 3 months at 10% per annum, which is 4840 × 10 × (3/12) / 100, resulting in Rs. 121. The total interest accrued is the sum of the 2-year compound interest of Rs. 840 and the 3-month simple interest of Rs. 121, totaling Rs. 961.

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