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What is the compound interest (in Rs.) on Rs. 2400 at the rate of 20% per annum compounded yearly for 2 years?
- a)960
- b)1024
- c)1056
- d)1120
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
What is the compound interest (in Rs.) on Rs. 2400 at the rate of 20% ...
Compound Interest = P (1 + r)t - P
Where P is the principal, r is the rate of interest and t is the time period.
= 2400 (1 + 20%)2 - 2400 = 2400 (1 + 20/100)2 - 2400 = (2400 × 36/25) - 2400
= Rs. 1056
Where P is the principal, r is the rate of interest and t is the time period.
= 2400 (1 + 20%)2 - 2400 = 2400 (1 + 20/100)2 - 2400 = (2400 × 36/25) - 2400
= Rs. 1056
Most Upvoted Answer
What is the compound interest (in Rs.) on Rs. 2400 at the rate of 20% ...
To calculate the compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the final amount (including both the principal and the compound interest)
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case:
P = Rs. 2400
r = 20% = 0.20 (as a decimal)
n = 1 (compounded yearly)
t = 2 years
Substituting these values into the formula, we get:
A = 2400(1 + 0.20/1)^(1*2)
A = 2400(1 + 0.20)^2
A = 2400(1.20)^2
A = 2400(1.44)
A = Rs. 3456
The final amount (A) is Rs. 3456, which includes both the principal amount (Rs. 2400) and the compound interest.
To calculate the compound interest, we subtract the principal amount from the final amount:
Compound Interest = A - P
Compound Interest = 3456 - 2400
Compound Interest = Rs. 1056
Therefore, the compound interest on Rs. 2400 at a rate of 20% per annum compounded yearly for 2 years is Rs. 1056.
Hence, the correct answer is option C) Rs. 1056.
A = P(1 + r/n)^(nt)
Where:
A = the final amount (including both the principal and the compound interest)
P = the principal amount (initial investment)
r = the annual interest rate (as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case:
P = Rs. 2400
r = 20% = 0.20 (as a decimal)
n = 1 (compounded yearly)
t = 2 years
Substituting these values into the formula, we get:
A = 2400(1 + 0.20/1)^(1*2)
A = 2400(1 + 0.20)^2
A = 2400(1.20)^2
A = 2400(1.44)
A = Rs. 3456
The final amount (A) is Rs. 3456, which includes both the principal amount (Rs. 2400) and the compound interest.
To calculate the compound interest, we subtract the principal amount from the final amount:
Compound Interest = A - P
Compound Interest = 3456 - 2400
Compound Interest = Rs. 1056
Therefore, the compound interest on Rs. 2400 at a rate of 20% per annum compounded yearly for 2 years is Rs. 1056.
Hence, the correct answer is option C) Rs. 1056.
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What is the compound interest (in Rs.) on Rs. 2400 at the rate of 20% per annum compounded yearly for 2 years?a)960b)1024c)1056d)1120Correct answer is option 'C'. Can you explain this answer?
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