What is the compound interest on Rs 1000 for 2 years at 10% per annum?
A
Rs 200
B
Rs 210
C
Rs 220
D
Rs 100
Correct Answer: Option B — Rs 210
Explanation:
CI = P(1+r/100)ⁿ - P = 1000(1.1)² - 1000 = 1210 - 1000 = Rs 210. Compound interest exceeds simple interest because interest is earned on pre...
CI = P(1+r/100)ⁿ - P = 1000(1.1)² - 1000 = 1210 - 1000 = Rs 210. Compound interest exceeds simple interest because interest is earned on previously accumulated interest. CI problems appear in banking and finance sections of competitive exams and require correct application of the compound interest formula.