A sum of \40000$ is deposited for 2 years at $5\%$ p.a. compound interest, interest added yearly. Find the interest earned.
Answer and explanation
Correct answer: B. \$4100
- Step 1: Amount after 2 years .
- Step 2: Interest .
Answer
\$4100.
Why not the others: \$4000: it is the simple interest for two years. \$44100: it is the total amount, not the interest. \$2000: it is one year of interest only.
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