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Simple & Compound Interest · Question 31 of 60

Question 31

EasyOriginal question

What is the compound interest on ₹25,000 at 20% per annum for 2 years, compounded annually?

Options for question 31

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. Amount = 25000×(1.2)2=25000×1.44=3600025000 \times (1.2)^2 = 25000 \times 1.44 = 36000.

  2. CI = ₹36,000 − ₹25,000 = ₹11,000.

Worth noting

₹10,000 is the simple interest. The extra ₹1,000 is the second year's 20% on the first year's ₹5,000 interest.

Concept
Compound interest for 2 years
Typical time
35 s
Your time
—
The rule this testsCompound interest
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