What would be the C.I. on amount rs. 12500 at the rate of 12% p.a. after 2 years?

Options

A. a. 3180rs.
B. b. 3360rs.
C. c. 3540rs.
D. d. 3720rs.

Answer

To find the compound interest (C.I.) on an amount of Rs. 12,500 at the rate of 12% per annum after 2 years, we can follow these steps:

### Step-by-Step Solution:

1. **Identify the formula for Compound Interest (C.I.):**
\[ C.I. = P \left(1 + \frac{r}{100}\right)^n - P \]
where:
- \( P \) = Principal amount (initial amount)
- \( r \) = Rate of interest per annum
- \( n \) = Time in years

2. **Substitute the given values into the formula:**
- \( P = 12,500 \)
- \( r = 12 \)
- \( n = 2 \)

Plugging in these values, we have:
\[ C.I. = 12500 \left(1 + \frac{12}{100}\right)^2 - 12500 \]

3. **Calculate \( \left(1 + \frac{12}{100}\right) \):**
\[ 1 + \frac{12}{100} = 1 + 0.12 = 1.12 \]

4. **Raise \( 1.12 \) to the power of 2:**
\[ (1.12)^2 = 1.12 \times 1.12 = 1.2544 \]

5. **Multiply by the principal amount:**
\[ 12500 \times 1.2544 = 15680 \]

6. **Subtract the principal amount from this result to find C.I.:**
\[ C.I. = 15680 - 12500 = 3180 \]

### Final Answer:
The compound interest (C.I.) on Rs. 12,500 at the rate of 12% per annum after 2 years is **Rs. 3,180**.

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