The simple interest on a sum of money at 10% per annum for 2 years is ₹ 8,100. Compounded annually, what would be the compound interest (in ₹) on the same sum for the same period at the same rate of interest?
Answer & explanation
Correct answer: option 2
Simple Interest = Rs 8100
Rate = 10 %
Time = 2 years
Simple Interest for 2 years = R%+ R% = 10% + 10% = 20%
Compound Interest for 2 years = R%+ R% + \(\frac{R% × R% }{100}\) = 10% + 10% + 1% = 21%
A.T.Q ,
⇒ 20% = Rs 8100
⇒ 1% = Rs \(\frac{8100}{20}\)
⇒ 21% = Rs \(\frac{8100}{20}\) × 21
= Rs 8505