A sum of ₹30,000 is invested on compound interest of 7$$\frac{1}{2}$$​% p.a. What is the sum at the end of the second year?

Correct option is D

Given:

Principal amount = ₹30,000

Rate of interest = 7$$\frac{1}{2} \%$$​ per annum = 7.5 % per annum

The interest is compounded annually.

Formula Used:
The formula for compound interest is:

A =$$P \left(1 + \frac{r}{100}\right)^t$$​

Where:

A is the amount after t years.

P is the principal.

r is the rate of interest.

t is the number of years.

Solution:

A= 300$$00 \left(1 + \frac{7.5}{100}\right)^2$$​ = 3000$$0 \left(1 + 0.075\right)^2$$​= 3000$$0 \times (1.075)^2$$​

=30$$000 \times 1.155625 = 34668.75$$​

Thus, the sum at the end of the second year is ₹34,668.75.

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