alleryRs 20,000 is borrowed for 2 years at 8 per cent compounded annually. What amount is repayable?
ARs 23,328
BRs 23,200
CRs 23,128
DRs 24,000
Answer & Solution
Correct answer: A. Rs 23,328
1. Interest for year 1 = (8/100) x 20000 = Rs 1,600.
2. Principal for year 2 = 20000 + 1600 = Rs 21,600.
3. Interest for year 2 = (8/100) x 21600 = Rs 1,728.
4. Amount at the end of year 2 = 21600 + 1728 = Rs 23,328.
5. Using the formula, 20000 x (1.08) squared gives the same Rs 23,328.
_Source: syllabus Maths Ch7 'Comparing Quantities', section 7.4_
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