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Mathematics

The amount of ₹ 1,000 in 2 years and at 20% compound interest compounded per year is:

  1. ₹ 1,200

  2. ₹ 1,400

  3. ₹ 800

  4. ₹ 1,440

Compound Interest

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Answer

Given, P = ₹ 1,000

R = 20%

n = 2 years

Using the formula, A = P(1+R100)nP\Big(1 + \dfrac{R}{100}\Big)^n

Substituting the values,

A=1,000(1+20100)2=1,000(1+210)2=1,000×(1210)2=1,000×144100=1,440.A = 1,000 \Big(1 + \dfrac{20}{100}\Big)^2\\[1em] = 1,000 \Big(1 + \dfrac{2}{10}\Big)^2\\[1em] = 1,000 \times \Big(\dfrac{12}{10}\Big)^2\\[1em] = 1,000 \times \dfrac{144}{100}\\[1em] = 1,440.

Hence, option 4 is the correct option.

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