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    Question

    Calculate the compound interest earned on investing Rs.

    20,000 at 25% per annum compounded annually for 2 years.
    A 12,150 Correct Answer Incorrect Answer
    B 18,200 Correct Answer Incorrect Answer
    C 11,250 Correct Answer Incorrect Answer
    D 15,115 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Image

    So, Compound interest = 20,000 × (1.25)² - 20,000

    Or compound interest = 31,250 - 20,000 = Rs. 11,250

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