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    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?
    A 4,200 Correct Answer Incorrect Answer
    B 3,334 Correct Answer Incorrect Answer
    C 2,500 Correct Answer Incorrect Answer
    D 3,700 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    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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