A reputed bank offers 4% interest rate on a certain sum, interest being…
2024
A reputed bank offers 4% interest rate on a certain sum, interest being compounded annually. A person deposits Rs. 2400 at the beginning of the year. At the end of the year, he would have an interest of:
Answer: B. Rs.96 — Step-by-Step SolutionFor a time period of exactly one year, compound interest is equal to simple interest, as the compounding process has not yet completed a…
- A.
Rs.93.54
- B.
Rs.96
- C.
Rs.78.99
- D.
Rs.45.98
Attempted by 8 students.
Show answer & explanation
Correct answer: B
Step-by-Step Solution
For a time period of exactly one year, compound interest is equal to simple interest, as the compounding process has not yet completed a cycle.
Identify the variables:
Principal (P) = Rs. 2400
Rate of interest (R) = 4% per annum
Time (T) = 1 year
Calculate the interest:
Interest = (Principal * Rate * Time) / 100
Interest = (2400 * 4 * 1) / 100
Interest = 24 * 4 = Rs. 96