A sum of Rs. 3200 is invested at 20% per annum compound interest (compounding…
2025
A sum of Rs. 3200 is invested at 20% per annum compound interest (compounding annually) for two years. How much interest will be received after two years?
- A.
Rs. 1468
- B.
Rs. 1324
- C.
Rs. 1304
- D.
Rs. 1408
Attempted by 540 students.
Show answer & explanation
Correct answer: D
Given:
Principal = Rs. 3200
Rate = 20% per annum
Time = 2 years
Formula used:
Compound interest = P[(1 + r/100)^n − 1]
Calculation:
Compute the growth factor: (1 + 20/100)^2 = (1.2)^2 = 1.44
Amount after 2 years = 3200 × 1.44 = 4608
Compound interest = Amount − Principal = 4608 − 3200 = 1408
Answer: The interest received after two years is Rs. 1408.