How much amount will be received on a principal of ₹10,000 at the rate of 12% per annum, compounded annually for 2 years?
Answer & explanation
Correct answer: option 3
From the formula for compound interest, we know,
Amount = P(1+$\frac{R}{100})^t$
= 10000 [ 1 + \(\frac{12}{100}\) ]² - 1200
= 10000 [ \(\frac{28}{25}\) × \(\frac{28}{25}\) - 1 ]
= 10000 [ \(\frac{784}{625}\) ]
= Rs. 12544