What will be the compound interest accrued on a sum of Rs.64000 at the rate of 5% per annum in 2 years compounded annually?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Rs. 6560.
Principal P = 64000
rate of interest r = 5%
time t = 2 year
Compound interest CI = P{1 + (r/100)t - 1}
= 64000{1 + (5/100)2 - 1}
= 64000{(441/400) - 1}
= 64000 × 41/400
= Rs 6560