If the simple interest on a sum of money at 8% per annum for 2 years is 1000 , find the compound interest on the same sum for the same period at the same rate in case of annual compounding.

Correct option is C

Given:

simple interest (SI) for 2 years at 8% per annum is ₹1000,

Formula Used:

SI = $$\frac{P\times R\times T}{100}$$

​​compound interest Formula:

A = P $$(1+\frac{R}{100})^t$$

A is the amount after time T

Solution:

SI = $$P\times\frac{8\times 2}{100}$$

1000 = P $$\times \frac{16}{100}$$

P = $$\frac{1000 \times 100}{16}$$

P = 6250

So, the principal amount (P) is ₹6250.

compound interest (CI):

A = P $$(1+\frac{R}{100})^t$$

A = 6250 $$(1+\frac{8}{100})^2$$

A = 6250 $$(1+0.08)^2$$

A= 6250 $$(1.08)^2$$

A = 6250 × 1.11664

A = 7290

CI = A − P

CI = 7290 - 6250

CI = 1040

the compound interest on the same sum for the same period at the same rate in the case of annual compounding is ₹1040.

Thus, correct option is (c)