Question
A sum of ₹20,000 is invested at 10% per annum
compound interest , compounded annually, for 2 years . What is the compound interest earned?Solution
Amount, A = P(1 + R/100)² = 20,000 × (1 + 10/100)² = 20,000 × (1.10)² = 20,000 × 1.21 = 24,200 Compound Interest (CI) = A − P = 24,200 − 20,000 = 4,200
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