Find the compound interest on ₹ 12000.for 2 years, if the rate of interest is `3%` per annum.

Options

A. ₹840.8
B. ₹935.7
C. ₹1035.6
D. ₹730.8

Answer

To find the compound interest on ₹12,000 for 2 years at an interest rate of 3% per annum, we can follow these steps:

### Step 1: Calculate the interest for the first year.
- The principal amount (P) is ₹12,000.
- The rate of interest (R) is 3% per annum.
- The interest for the first year (I1) can be calculated using the formula:

\[ I1 = P \times \frac{R}{100} = 12000 \times \frac{3}{100} = 360 \text{ rupees} \]

### Step 2: Calculate the total amount after the first year.
- The total amount (A1) after the first year is the principal plus the interest earned in the first year:

\[ A1 = P + I1 = 12000 + 360 = 12360 \text{ rupees} \]

### Step 3: Calculate the interest for the second year.
- Now, we will calculate the interest for the second year using the total amount after the first year as the new principal:

\[ I2 = A1 \times \frac{R}{100} = 12360 \times \frac{3}{100} = 370.8 \text{ rupees} \]

### Step 4: Calculate the total compound interest.
- The total compound interest (CI) is the sum of the interest earned in both years:

\[ CI = I1 + I2 = 360 + 370.8 = 730.8 \text{ rupees} \]

### Final Answer:
The compound interest on ₹12,000 for 2 years at a rate of 3% per annum is **₹730.8**.

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