The compound interest on a certain sum of money at 21% p.a. for 2 years is Rs 11,138.40(interest compounded yearly).
The total amount received (in Rs) after 2 years is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 35,138.40
Rate = 21% p.a
Time = 2 years
Compound Interest = Rs 11,138.40
The effective rate for two years = r1 + r2 + r1r2/100 (Where r1 and r2 are successive rates offered in the two-year period)
Effective rates for 2 years = 21 + 21 + 21(21)/100 = 46.41%
Amount = Principal + Compound interest
Principal = 11138.40(100)/46.41 = Rs. 24000
Amount = 24000 + 11138.40 = Rs. 35138.40