The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is
(a) Rs 4,000
(b) Rs 4,080
(c) Rs 4,280
(d) Rs 4,050

Solution:

The expression which helps determining compound interest is:

A = P(1 + r/100)ⁿ

And

Compound Interest (CI) = A - P

Where,

A = Amount at the end of the designated period

P = principal

r = rate of interest compounded annually

n = time period

P = Rs. 50, 000

r = 4% compounded annually

n = 2 years

Therefore we can write:

A = 50,000(1 + 4/100)²

= 50,000(1.04)²

= 50,000(1.0816)

= 54,080

Hence,

CI = 54,080 - 50,000

CI = Rs. 4,080

✦ Try This: The compound interest on Rs 50,000 at 8% per annum for 1 years compounded semi-annually is (a) Rs 4,000, (b) Rs 4,080, (c) Rs 4,280, (d) Rs 4,050

Since,

A = P[1 + (r/2)(1/100)]ⁿ

= P[1 + (r/200)]ⁿ

= 50,000[1 + (8/200)]²

= 50,000[1 + 0.04]²

= 50,000[1.04]²

= 50,000[1.0816]

= 54,080

CI = 54,080 - 50,000

= Rs.4,080

☛ Also Check: NCERT Solutions for Class 8 Maths Chapter 8

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NCERT Exemplar Class 8 Maths Chapter 9 Problem 3

The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is (a) Rs 4,000, (b) Rs 4,080, (c) Rs 4,280, (d) Rs 4,050

Summary:

The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is Rs.4080

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