Question:
Mark (✓) against the correct answer:
The compound interest on Rs 5000 at 10% per annum for 2 years is
(a) Rs 550
(b) Rs 1050
(c) Rs 950
(d) Rs 825
Solution:
(b) Rs 1050
$P=$ Rs. 5000
$R=10 \%$
$n=2$ years
Now, $A=$ Rs. $P \times\left(1+\frac{R}{100}\right)^{n}$
$=$ Rs. $5000 \times\left(1+\frac{10}{100}\right)^{2}$
$=$ Rs. $5000 \times\left(\frac{110}{100}\right)^{2}$
$=$ Rs. $5000 \times\left(\frac{11}{10}\right) \times\left(\frac{11}{10}\right)$
$=$ Rs. $(50 \times 11 \times 11)$
$=$ Rs. 6050
$\therefore \mathrm{CI}=A-P=$ Rs. $(6050-5000)=$ Rs. 1050