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Simple & Compound Interest · Question 40 of 60

Question 40

MediumOriginal question

Meenal invests ₹50,000 in a scheme paying 12% per annum, compounded annually. How much interest does she earn in the second year alone?

Options for question 40

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. After year 1 the balance is ₹50,000 + ₹6,000 = ₹56,000.

  2. Second-year interest = 12% of ₹56,000 = ₹6,720.

Worth noting

₹6,000 is the first year's interest; ₹12,720 is the total for both years; ₹7,526.40 is the third year's interest.

Concept
Interest earned in a single year at compound interest
Typical time
50 s
Your time
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The rule this testsCompound interest
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Ten questions from Simple & Compound Interest, at your own pace.

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