A person invests ₹55,000 for two years on compound interest such that the rate of interest for the first year is 8% per annum and that for the second year is 12% per annum, and the interest is compounded annually. What is the total interest earned by the person?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹ 11,528
Compound interest = P(1 + R/100)T - P ----- (1)
Where, P = principal, R = rate and T = time
According to the question;
⇒ Compound interest = 55000 × 108/100 × 112/100 - 55000
⇒ 66528 - 55000 = ₹ 11528