The compound interest (in Rs., to the nearest integer) on Rs. 8950 for 2 years at the rate of 9% per annum, compounded annually is:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 1683
When the interest rate is compounded per year at r% the total interest rate = [r + r + (r × r)/100]%
The total interest in 2 years = 9 + 9 + (9 × 9)/100 =18.81%
Compounded interest on Rs. 8950 = 18.81% of 8950
⇒1683.45
⇒ Rs.1683