Multiple choice

What would be the compound interest occurred on an amount of Rs. 6850 at the rate of 14% per annum in 2 years?

  1. Rs. 3052.26

  2. Rs. 2052.26

  3. Rs. 2552.26

  4. Rs. 2852.26

  5. Rs. 2252.26
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

CI = P * ((1 + r/100)^n - 1). CI = 6850 * ((1.14^2) - 1) = 6850 * (1.2996 - 1) = 6850 * 0.2996 = 2052.26.

AI explanation

Using the fraction equivalent method for two years, the compound interest is 14 + 14 + 1.96 = 29.96% of the principal. The interest is 29.96% of 6850, which equals 0.2996 multiplied by 6850 to give Rs. 2052.26.

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