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Question
The compound interest on ₹ 5000 at 12% p.a for 2 years, compounded annually is ___________
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Solution
₹ 1272
Explanation;
Hint:
Compound Interest (C.I.) formula is
C.I. = Amount – Principal
Amount = `"A"(1 + "r"/100)^"n"`
= `5000(1 + 12/100)^2`
= `5000 xx (112/100)^2`
= 6272
∴ 6272 – 5000 = ₹ 1272
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