What would be the compound interest of Rs. 25000 for 2 years

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What would be the compound interest of Rs. 25000 for 2 years at the rate of 5% per annum ?

1. Rs. 2500
2. Rs. 2562.5
3. Rs. 2425.25
4. Rs. 5512.5

Correct Option: B

Given in question , Principal ( P ) = Rs. 25000 , Compound Interest ( CI ) = ? , Rate ( R ) = 5% , Time = 2 years
We can find required answer with the help of given formula ,

C.I. = P			1 +	R		^T	− 1
				100

C.I. = 25000			1 +	5		²	− 1
				100

C.I. = 25000			1 +	1		²	− 1
				20

C.I. = 25000				21		²	− 1
				20

C.I. = 25000		441	− 1
		400

C.I. = 2500		441 − 400
		400

C.I. =	25000 × 41	= Rs. 2562.5
	400