What will be the compound interest of 2 years at the rate of 15% per annum compounded annually for an amount of Rs. 2,800?
- ARs. 956
- BRs. 903
- CRs. 1,000
- DRs. 875
Solution & Step-by-step Explanation
Principal (P) = Rs. 2,800
Rate of interest (R) = 15% per annum
Time (n) = 2 years
Effective compound interest rate for 2 years:
Effective Rate=R+R+
100
R×R
Effective Rate=15+15+
100
15×15
=30+2.25=32.25%
Compound Interest (CI):
CI=32.25% of 2800
CI=
100
32.25
×2800=32.25×28=Rs. 903
Rate of interest (R) = 15% per annum
Time (n) = 2 years
Effective compound interest rate for 2 years:
Effective Rate=R+R+
100
R×R
Effective Rate=15+15+
100
15×15
=30+2.25=32.25%
Compound Interest (CI):
CI=32.25% of 2800
CI=
100
32.25
×2800=32.25×28=Rs. 903