Question

Calculate compound interest on Rs $2000$ for $2$ years at the rate $5\%$

• A. $105$
• B. $200$
• C. $205$
• D. $2205$

Answer 1

Answer: (C)

For the first year, $P=Rs.2000,R=5\%$

so, I = $\frac{P\times R\times T}{100}=\frac{Rs.2100\times 5\times 1}{100}=Rs.105$

The amount after the second year =$Rs.2100+Rs.105$

$=Rs.2205$

Final amount =$Rs.2205$

Hence, Compound Interest = final amount - original amount

$=Rs.2205-Rs.2000=Rs.205$