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