What is the compound interest on Rs. 62,500 for 2 years at 8% per annum compounded yearly?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs. 10,400
Given that
Principal = Rs. 62,500
Rate of interest = 8% per annum compounded yearly
Time = 2 years
Formula used
Compound interest = Principal (1 + Rate/100)Time - Principal
Calculation
C.I. = 62500 (1 + 8/100)2 - 62500
C.I. = 62500 (27/25)2 - 62500
C.I. = Rs. 10400