What will be the compound interest on Rs. 14,000 for 2 years at the rate of 10% per annum compounded annually?

Question

Question

This question was previously asked in

SSC CHSL Tier-I Exam 2022 Official Paper (Held On: 09 March, 2023 Shift 1)

Answer 1

Given

Principal amount (P) = Rs. 14,000

Time period (t) = 2 years

Rate of interest (r) = 10%

Since the interest is compounded annually, we can use the formula:

\(A = P(1 + r/100)^t\)

where A is the amount after t years, P is the principal amount, r is the rate of interest per annum and t is the time period.

Calculation:

\(A = P(1 + r/100)^t\)

Substituting the given values, we get:

\(A = 14000(1 + 10/100)^2\\ A = 14000(1.1)^2\\ A = 14000(1.21)\\ A = 16940\)

Now, we can find the compound interest by subtracting the principal amount from the amount after 2 years:

Compound interest = A - P

Compound interest = 16940 - 14000

Compound interest = 2940

Therefore, the compound interest on Rs. 14,000 for 2 years at the rate of 10% per annum compounded annually is Rs. 2,940.