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A sum of rupees 3200 is compounded annually at the rate of 25 paise per rupee per annum. Find the compound interest payable after 2 years.
  • a)
    1200
  • b)
    1600
  • c)
    1800
  • d)
    2000
  • e)
    None of these
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
A sum of rupees 3200 is compounded annually at the rate of 25 paise pe...
Rate of interest is 25 paise per rupee per annum.
So for 100 rupees it is 2500 paise i.e. 25 percent
Now, CI = 3200(1+25/100)2 – 3200 = 1800
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Most Upvoted Answer
A sum of rupees 3200 is compounded annually at the rate of 25 paise pe...
Rate of interest is 25 paise per rupee per annum.
So for 100 rupees it is 2500 paise i.e. 25 percent
Now, CI = 3200(1+25/100)2 – 3200 = 1800
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Community Answer
A sum of rupees 3200 is compounded annually at the rate of 25 paise pe...
Given:
Principal = Rs. 3200
Rate of interest = 25 paise per rupee per annum
Time = 2 years

To find: Compound interest payable

Formula:
Compound interest = P[(1 + R/100)^n - 1]
where P = Principal, R = Rate of interest, n = Time

Calculation:
R = 25 paise per rupee per annum = 25/100 = 0.25
P = Rs. 3200
n = 2 years

Compound interest = P[(1 + R/100)^n - 1]
= 3200[(1 + 0.25/100)^2 - 1]
= 3200[(1.0025)^2 - 1]
= 3200[1.00500625 - 1]
= 3200 x 0.00500625
= Rs. 16.02

Hence, the compound interest payable after 2 years is Rs. 16.02 which is approximately equal to Rs. 16. Therefore, the correct option is (c) 1800.
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