Multiple choice

A man invests Rs. $30,800$ at $5$% per annum compound interest for $3$ years. Calculate: the interest for the first year.

  1. Rs. $1,540$
  2. Rs. $1,627$
  3. Rs. $1,721$
  4. Rs. $1,863$
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A Correct answer
Explanation

The interest for the first year is simply the principal multiplied by the rate: 30800 * 0.05 = 1540.

AI explanation

The interest for the first year of a compound interest investment is the same as simple interest for one year. Using the formula SI = P * R * T / 100, the interest is 30800 * 5 * 1 / 100 = 1540. The result is Rs. 1,540.

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