Question : Find the compound interest on Rs. 8000 at 15% per annum for 2 years (compounded annually).
Option 1: Rs 2580
Option 2: Rs 2450
Option 3: Rs 2400
Option 4: Rs 2550
Correct Answer: Rs 2580
Solution :
$P$ = Rs.8000, $r$ = 0.15 (15% expressed as a decimal), $n$ = 1 (compounded annually), and $t$ = 2 years.
Amount = $P(1+\frac{r}{n})^{nt}$
Amount = 8000×$({1.15}^{2})$
⇒ A = $8000×1.3225$
⇒ A = 10,580
Now, the compound interest (CI) can be calculated using the formula:
CI = A − P
⇒ CI = 10,580 − 8000
⇒ CI = 2,580
Hence, the correct answer is Rs. 2,580.
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