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The simple interest accrued on a sum of certain capital principal is Rs. 6400/- in four years at the rate of 8 p.c.p.a. what would be the compound interest accrued on that principal at the rate of 2 p.c.p.a. in 2 years?
  • a)
    Rs.800
  • b)
    Rs. 808/-
  • c)
    Rs. 704/-
  • d)
    Rs. 700/-
  • e)
    None of these
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
The simple interest accrued on a sum of certain capital principal is R...
Given:
Simple interest (S.I.) = Rs. 6400/-
Time (t) = 4 years
Rate of interest (r) = 8%

To Find:
Compound interest (C.I.) at the rate of 2% for 2 years

Solution:
Let the Principal (P) be Rs. x

Calculation of Simple Interest:
S.I. = (P * r * t)/100
6400 = (x * 8 * 4)/100
x = Rs. 20000

Calculation of Compound Interest:
Compound Interest (C.I.) = P(1 + r/100)^t - P
C.I. = x(1 + 2/100)^2 - x
C.I. = x(1.02)^2 - x
C.I. = x(1.0404) - x
C.I. = 20000(1.0404) - 20000
C.I. = Rs. 808/-

Therefore, the compound interest accrued on the principal at the rate of 2% for 2 years is Rs. 808/-. Hence, option (B) is the correct answer.
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The simple interest accrued on a sum of certain capital principal is Rs. 6400/- in four years at the rate of 8 p.c.p.a. what would be the compound interest accrued on that principal at the rate of 2 p.c.p.a. in 2 years?a)Rs.800b)Rs. 808/-c)Rs. 704/-d)Rs. 700/-e)None of theseCorrect answer is option 'B'. Can you explain this answer?
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