A sum of ₹13,475 is invested at 7.5% per annum compounded annually for 2 years. Find the compound Interest earned (rounded to the nearest rupee).

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AFCAT 17th Feb 2024 (Shift 1) Memory Based Paper.
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  1. ₹2,203
  2. ₹2,021
  3. ₹2,156
  4. ₹2,097

Answer (Detailed Solution Below)

Option 4 : ₹2,097
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AFCAT 16th Feb 2024 (Shift 1) Memory Based Paper.
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Detailed Solution

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Given:

Principal (P) = ₹13,475

Rate (r) = 7.5% per annum

Time (t) = 2 years

Formula used:

Compound Interest (CI) = A - P

Amount (A) = P × (1 + r/100)t

Calculation:

A = 13,475 × (1 + 7.5/100)2

⇒ A = 13,475 × (1 + 0.075)2

⇒ A = 13,475 × (1.075)2

⇒ A = 13,475 × 1.155625

⇒ A = ₹15,572 (rounded to nearest rupee)

CI = A - P

⇒ CI = 15,572 - 13,475

⇒ CI = ₹2,097

∴ The correct answer is option (4).

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