Multiple choice

Find the compound interest on 5000 at 10% per annum for 1 year, interest compounded annually.

  1. 400

  2. 250

  3. 1000

  4. 500
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 1 year, simple interest and compound interest are the same. Interest = Principal * Rate * Time / 100 = 5000 * 10 * 1 / 100 = 500.

AI explanation

Using the compound interest formula for one year, the interest is calculated as 10 percent of 5000. This gives (10 / 100) times 5000, which equals 500. The compound interest for one year is 500.

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