Multiple choice

What is the compound interest on Rs. 1000 for 2 years at 20% per annum, compounded annually?(a) Rs. 200(b) Rs. 400(c) Rs. 240(d) Rs. 440(e) Rs. 1440

  1. D

  2. A

  3. E

  4. C

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

Compound interest = P(1 + r/100)^n - P. For P = 1000, r = 20, n = 2: 1000(1.2)^2 - 1000 = 1000(1.44) - 1000 = 1440 - 1000 = 440. Option D corresponds to 440.

AI explanation

Using the compound interest formula, the amount after two years is 1000 multiplied by 1.20 raised to the power of 2, which gives 1440. Subtracting the original principal of 1000 from this amount gives a compound interest of 440. The result is Rs. 440.

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