Find the compounds interest on ₹ 5000 for 2 years at 4% p.a.
Answer & explanation
Correct answer: option 2
Amount = Principal + Compound interest
In compound interest,
Amount = Principal × ( 1 + \(\frac{R}{100}\) )t
= 5000 × ( 1 + \(\frac{4}{100}\) )²
= 5000 × ( \(\frac{26}{25}\) )²
= 5408
CI = 5408 - 5000
= 408
The correct answer is Option (2) → 408