The compound interest on Rs. 40,000 at 6% per annum is Rs. 4,944. What is the period (in years) for which the amount is invested?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 2 years
We know that,
For compound Interest,
P + I = P(1 + r/100)n
Here,
P = Principal Amount
I = Interest
r = Rate
n = time (years)
So,
⇒ 40000 + 4944 = 40000(1 + 6/100)n
⇒ 44944/40000 = (1.06)n
⇒ 1.1236 = (1.06)n
⇒ n = 2