Question

2 points The compound interest on a certain sum for the first year for 4 % is Rs. 25. The compound interest for 2 years at the same rate on the same sum will be ...​

Answer 1

The interest for the two years is Rs 51.

Explanation:

Rate, R = 4 %

Compound interest for 1 year = Rs 25

Let the sum is P.

For first year,

`A = P \left ( 1+(R)/(100) \right )^1\\\\A = P(1+0.04)\\\\A - P = 0.04 P\\\\0.04 P = 25\\\\P= Rs625`

For 2 year

`A = P \left ( 1+(R)/(100) \right )^2\\\\A = 625(1+0.04)^2\\\\A = 676\\`

Interest is

Interest = Rs 676 - Rs 625 = Rs 51