The simple interest on sum of money at 15% per annum for 2 years is Rs.2,700 compounded annually, what would be the compound interest (in Rs.) on the same sum for the same period and at rate of interest?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 2,902.50.
SI = PRT/100
According to the given question,
2700 = P × 2 × 15/100
⇒ P = 9000
Now, Amount = P(1 + R/100)T
⇒ Amount = 9000(1 + 15/100)2
⇒ Amount = 9000 × 23/20 × 23/20
⇒ Amount = 11902.5
Now, CI = Amount - Principal
⇒ CI = 11902.5 - 9000
⇒ CI = 2902.5