Question : What is the compound interest on Rs. 8400 for 2 years at 10% per annum compounded annually?
Option 1: Rs. 10164
Option 2: Rs. 840
Option 3: Rs. 5064
Option 4: Rs. 1764
Correct Answer: Rs. 1764
Solution :
We have,
Principal = Rs. 8400
Rate = 10% per annum
Time = 2 years
$\text{Compound Interest}=\text{Principal}×(1+\frac{\text{Rate}}{100})^{\text{Time}}-\text{Principal}$
$⇒\text{Compound Interest}=8400×(1+\frac{\text{10}}{100})^{\text{2}}-\text{8400}$
$⇒\text{Compound Interest}=8400×(\frac{\text{11}}{10})^{\text{2}}-\text{8400}$
$⇒\text{Compound Interest}=8400×(\frac{\text{121}}{100})-\text{8400}$
$⇒\text{Compound Interest}=84×121-\text{8400}$
$\therefore\text{Compound Interest}=10164-\text{8400}=1764$
Hence, the correct answer is Rs. 1764.
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