What is the compound interest on Rs. 20,000 at 20% per annum for 3 years (compounded annually)?
Answer and explanation
Correct answer: A. Rs. 14,560
- Step 1: Amount = 20,000 × (1 + 0.2)³ = Rs. 34,560. Step 2. Interest = Rs. 34,560 − Rs. 20,000 = Rs. 14,560. Answer: Rs. 14,560. Why not the others: Rs. 12,000 is what you get if you use simple interest. Rs. 34,560 is what you get if you give the amount instead of the interest. Rs. 8,800 is what you get if you compound for only two years.
Practise more Number system, arithmetic and algebra.
Free questions with an explanation for every one, and full timed CAT mock tests.
More Number system, arithmetic and algebra questions
- How many zeroes are there at the end of 150! ?
- How many positive divisors does 200 have?
- The HCF of two numbers is 9 and their LCM is 189. One number is 63. What is the other?
- A boat goes 330 km downstream and returns upstream. Its speed in still water is 13 km/h and the stream flows at 2 km/h. How long does the wh…
- In how many ways can the letters of the word BALLOON be arranged?
- Find the area of a triangle with sides 13 cm, 14 cm and 15 cm.