Quantitative Aptitude • Simple & Compound InterestMedium
What is the compound interest on ₹1,675 for 2 years at 20% per year, compounded annually?
A. ₹670
B. ₹737✓ Correct Answer
C. ₹335
D. ₹2,412
💡 Solution & Explanation
Year 1 interest = 20% of ₹1,675 = ₹335, so the amount becomes ₹2,010. Year 2 interest = 20% of ₹2,010 = ₹402. Total compound interest = ₹737. Simple interest would be only ₹670; the extra is interest earned on the first year's interest.
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