Multiple choice

What is the compound interest on Rs. 2500 for 2 years at rate of interest 4% per annum?

  1. 209

  2. 204

  3. 223

  4. 224

  5. 245
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest = P * ((1 + r/100)^n - 1). CI = 2500 * ((1 + 4/100)^2 - 1) = 2500 * (1.0816 - 1) = 2500 * 0.0816 = 204.

AI explanation

Using the compound interest formula for two years, the interest is calculated as the principal multiplied by the quantity of the rate squared divided by 100 plus twice the rate. Substituting the given values gives 2500 multiplied by the quantity of 4 squared divided by 100 plus 2 multiplied by 4. This simplifies to 2500 multiplied by the quantity of 16 divided by 100 plus 8, which becomes 2500 multiplied by 0.0816. Multiplying these results in a compound interest of Rs. 204.

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