2000 dinars are invested for 2 years at 20% compound interest per year. What is the amount after 2 years?
Answer and explanation
Correct answer: B. 2880
- Step 1: After year 1: 2000 x 1.2 = 2400.
- Step 2: After year 2: 2400 x 1.2 = 2880.
Answer
2880.
Why not the others: 2800 is simple interest; 800 is only the simple interest earned; 2400 is the amount after one year.
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