Find the compound interest on ₹ 1,600 at 15% per annum for 2 years, compounded annually.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹ 516.
Given:
Principal = 1600
Rate = 15%
Time = 2 years
Formula used:
CI = P(1 + R/100)T - P ---- (1)
Where, CI = compound interest, P = principal, R = rate and T = time
Calculations:
Using equation (1), we get
⇒ CI = 1600(1 + 15/100)2 - 1600
⇒ CI = 1600(23/20)2 - 1600
⇒ CI = 2116 - 1600 = ₹ 516