If a sum of Rs. 2000 is lent at 10% p.a. compound interest, what is the interest for the second year?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs. 220
CI = P(1 + R/100)T - P
P = 2000, R = 10% , T = 2 Years
CI = 2000(1 + 10/100)2 - 2000
CI = 2000(11/10)2 - 2000
CI = 2000 × 121/100 - 2000
CI = 2420 - 2000 = 420Rs.
frist year CI = 10% of 2000 = 200
CI for second year = 420 - 200 = 220 Rs.