Rs. $12{,}500$ is invested at $8\%$ p.a. compounded annually for $2$ years. The compound interest earned is

Rs. $12{,}500$ is invested at $8\%$ p.a. compounded annually for $2$ years. The compound interest earned is
  1. Rs. $1{,}900$
  2. Rs. $2{,}000$
  3. Rs. $2{,}080$
  4. Rs. $2{,}160$

Solution

$A = 12500 \times (1.08)^{2} = 12500 \times 1.1664 = 14580$. CI $= 14580 - 12500 = 2080$.

Asked in: IMO

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