The simple interest on a sum of Rs.50,000 at the end of two years is Rs.4,000. What would be the compound interest on the same sum at the same rate for the same period?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. Rs.4,080.
| Understanding/Application |
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p = Rs. 50000 i = Rs. 4000 t = 2 years i = P×R×T/100 4000 = 50000(r)(2)/100 r = 4% |
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C.I. = p(1 + r/100)t - p = 50000(1 + 4/100)2 - 50000 = 50000(26/25)2 - 50000 = 54080 - 50000 = 4080 |