Given a principal of ₹ 40, 000 and an interest rate of 8% p.a. compounded annually. What is the interest rate for a four - year period?

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₹ 200

₹ 300

₹ 14419.5584

₹ 2200

answer is C.

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Detailed Solution

Given, a principal of ₹ 40, 000 and an interest rate of 8% p.a. compounded annually.
We know that compound interest =

P (1 + \frac{r}{100})^{t} - P

where, P is the principal amount, r is the interest rate, and t is the time.
CI =

40000 (1 + \frac{8}{100})^{4} - 40000

40000 (1.08)^{4} - 40000

= 54419.5584 - 40000

= 14419.5584

Hence, the compound interest is ₹ 14419.5584.
So, option 3 is correct.

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