Question 24

What is the total earning after 2 years from ₹ 18,750 on variable compound interest if the rate of interest for the first 4 year is 4% and for the second, it is 8%?

Solution

P=18750

1st year = 4%

2nd year = 8%

Interest for 1st year $$= \frac{18750\times 4\times 1}{100} = 750$$

Principal after 1st year $$= 18750+750 = 19500$$

Interest for 2nd year $$=\frac{19500\times 8\times 1}{100} = 1560$$

Total interest = 750+1560 = 2310

Option D is correct.

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