Question

What will Rs. 40,000 amount to in 2 years at the rate of 20% p.a., if interest is compounded yearly?

• A. 48620
• B. 58564
• C. 57600
• D. 60000

Answer 1

Answer:

C. 57600

Compound interest for 2 years,$Amount=P(1+\frac{R}{100})^2$

ATQ,

$$P=40,000 , R=20$$Alternate Method;

$$Amount in 2years = 40000+8000+8000+16000

$=57600$