Practicing Success
A person invests ₹55,000 for two years on compound interest such that the rate of interest for the first year is 8% per annum and that for the second year is 12% per annum, and the interest is compounded annually. What is the total interest earned by the person? |
₹11,645 ₹11,528 ₹12,386 ₹10,847 |
₹11,528 |
In 1st year , Rate of interest = 8% In 2nd year , Rate of interest = 12% Total rate for 2 years = 8% + 12% + \(\frac{8 × 12}{100}\)% = 20.96% So, Interest earned in 2 years = 20.96% of 55000 = \(\frac{20.96}{100}\) × 55000 = Rs. 11528 |