Multiple choice

A man invests Rs. 1,200 for two years at compound interest. After one year his money amoiunts to Rs. 1,275. Find the interest for the second year correct to the nearest rupee.

  1. Rs. 60

  2. Rs. 80

  3. Rs. 100

  4. Rs. 120
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 1200. Amount after 1 year = 1275. Interest for 1st year = 75. Rate = (75 / 1200) * 100 = 6.25%. For compound interest, the interest for the 2nd year is 6.25% of the amount after 1 year: 1275 * 0.0625 = 79.6875. Rounded to the nearest rupee, this is 80.

AI explanation

The interest for the first year is 1275 - 1200 = Rs. 75, making the annual compound interest rate (75 / 1200) * 100 = 6.25%. In the second year, this rate applies to the new principal of Rs. 1,275, so the interest is 6.25% of 1275. Calculating (1275 / 100) * 6.25 gives Rs. 79.6875, which rounds to the nearest rupee as Rs. 80.

Keep practicing — related questions