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# The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is

(a) Rs 4,000

(b) Rs 4,080

(c) Rs 4,280

(d) Rs 4,050

**Solution:**

The expression which helps determining compound interest is:

A = P(1 + r/100)^{n}

And

Compound Interest (CI) = A - P

Where,

A = Amount at the end of the designated period

P = principal

r = rate of interest compounded annually

n = time period

P = Rs. 50, 000

r = 4% compounded annually

n = 2 years

Therefore we can write:

A = 50,000(1 + 4/100)^{2}

= 50,000(1.04)^{2}

= 50,000(1.0816)

= 54,080

Hence,

CI = 54,080 - 50,000

CI = Rs. 4,080

**✦ ****Try This: **The compound interest on Rs 50,000 at 8% per annum for 1 years compounded semi-annually is (a) Rs 4,000, (b) Rs 4,080, (c) Rs 4,280, (d) Rs 4,050

Since,

A = P[1 + (r/2)(1/100)]^{n}

= P[1 + (r/200)]^{n}

= 50,000[1 + (8/200)]^{2}

= 50,000[1 + 0.04]^{2}

= 50,000[1.04]^{2}

= 50,000[1.0816]

= 54,080

CI = 54,080 - 50,000

= Rs.4,080

**☛ Also Check: **NCERT Solutions for Class 8 Maths Chapter 8

**NCERT Exemplar Class 8 Maths Chapter 9 Problem 3**

## The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is (a) Rs 4,000, (b) Rs 4,080, (c) Rs 4,280, (d) Rs 4,050

**Summary:**

The compound interest on Rs 50,000 at 4% per annum for 2 years compounded annually is Rs.4080

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