What is the compound interest (in ₹, nearest to a rupee) on a sum of ₹ 8000 for 2 years at the rate of 16% p.a., interest compounded yearly?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹2980
First year interest = 8000 × 16/100 = 1280
Second year interest = 1280 + 1280 × 16/100 = 1484.8
1/8 year interest = 8000 × 16/100 × 1/8 + 1280 × 16/100 × 1/8 + 1484.8 × 16/100 × 1/8= 160 + 25.6 + 29.68 = 215.28
Total interest = 1280 + 1484.8 + 215.28 = Rs 2980