What is the compound interest on a sum of ₹12,000 for $2\frac{5}{8}$ years at 8% p.a., when the interest is compounded annually? (nearest to a rupee)
Answer & explanation
Correct answer: option 2
Interest for the first 2 years = 8%
and Interest for last \(\frac{5 }{8}\) year = \(\frac{5 }{8}\) × 8% =5%
So ,
Principal : Amount
For 1st year 25 : 27
For 2nd year 25 : 27
For 3rd year 20 : 21
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overall 12500 : 15309
ATQ,
12500R = 12000
1R = 0.96
CI = ( 15309 - 12500 )R = 2809R
= 2809 × 0.96
= 2696.64
= 2697 ( approx )