Find the compounds interest on ₹ 5000

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Target Exam

CUET

Subject

General Test

Chapter

Numerical Ability

Topic

Compound Interest

Question:

Find the compounds interest on ₹ 5000 for 2 years at 4% p.a.

Options:

508

408

608

800

Correct Answer:

408

Explanation:

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