Answer :
The compound interest on Rs. 20000 at a 6% interest rate per annum for 4 years is Rs. 5249.53. So, the correct option is A.5249.53.
To solve this problem, apply the formula of compound interest:
A = P (1 + r/n)^(nt)
In this formula, A is the amount of money accumulated after n years, including interest.
P = principal amount
r = annual interest rate
n = Count of compounding per year
t = the time of investment
We're finding the compound interest, so we'll need to subtract the principal from the total amount.
For our problem:
Principal amount (P) = Rs. 20000.
Annual interest rate (r) = 6% or 0.06 in decimal.
The time the money is invested for (t) = 4 years.
And n = 1 (since compounded annually).
Substitute these values into the formula:
A = 20000(1 + 0.06/1)^(1*4)
Simplify inside the parentheses:
A = 20000(1+0.06)⁴
That is:
A = 20000(1.06)⁴
Calculate the amount:
A = 20000 * 1.262476
Then we find A = Rs. 25249.53
We subtract the original principal amount to find the interest:
interest = A - P
= Rs. 25249.53 - Rs. 20000
= Rs. 5249.53
So, the compound interest on Rs. 20000 at a 6% interest rate per annum for 4 years is Rs. 5249.53. Hence, the correct answer is A.5249.53.
To know more about the compound interest concept, visit here:
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