At the end of two years what will be the compound interest at the rate of 10% p.a. on an amount of Rs.2000?Rs.620Rs.422Rs.420Rs.520

To calculate the compound interest, we use the formula:

A = P (1 + r/n) ^ nt

Where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years

Given in the problem: P = Rs. 2000 r = 10% per annum = 0.10 (in decimal) n = 1 (interest is compounded annually) t = 2 years

Substituting these values into the formula:

A = 2000 (1 + 0.10/1) ^ (1*2) A = 2000 (1 + 0.10) ^ 2 A = 2000 * 1.10 ^ 2 A = 2000 * 1.21 A = Rs. 2420

The compound interest is then calculated by subtracting the initial principal from the compounded amount:

Compound Interest = A - P Compound Interest = Rs. 2420 - Rs. 2000 Compound Interest = Rs. 420

So, the compound interest at the end of two years will be Rs. 420.