Correct Answer - Option 1 : 880
Given
Compound interest earned for 2 year on a sum of Rs.2000 at the rate of 20% per annum
Concept used
Ratio method
20% = 5 : 6
Calculation
20% = 5 : 6
Ci for two years
⇒ 5 : 6
⇒ 5 : 6
⇒ 5 × 5 : 6 × 6
⇒ 25 : 36
Interest = 36 - 25
Interest = 11
Principal = 2000
25 unit = 2000
1 unit = 80
Ci = 80 × 11
Ci = Rs. 880
Second method
\(2000 × \frac{{120}}{{100}} × \frac{{120}}{{100}}\)
2 × 12 × 120
120 × 24
∴ Amount = Rs. 2880
Interest = Amount - Principal
Interest = 2880 - 2000
Interest = Rs.880
