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    Question

    Calculate the total interest earned after 2 years on an

    investment of Rs. 2,500, with an annual compound interest rate of 20%, compounded annually.
    A Rs. 2,000 Correct Answer Incorrect Answer
    B Rs. 1,200 Correct Answer Incorrect Answer
    C Rs. 1,100 Correct Answer Incorrect Answer
    D Rs. 1,600 Correct Answer Incorrect Answer

    Solution

    Interest = 2500 x [1 + (20/100) ]2 - 2500 = 2500 x (6/5) 2 - 2500 = 2500 x (36/25) - 2500 = 3600 - 2500 = Rs. 1,100

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