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easyQ. No. 6810-find-the-compound-interest-on-rs-1000-at-20-for-2-years

Find the compound interest on Rs.1000 at 20% for 2 years.

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This Profit and Loss question develops correct identification of cost price, selling price, marked price, discount and the relevant percentage base in “Find the compound interest on Rs.1000 at 20% for 2 years.”. The worked explanation retains the original numerical relationship, verifies 440, and distinguishes common traps such as reversing CP and SP, adding successive rates or confusing discount with loss. It is designed for SSC, Railway, Banking, State examinations and other quantitative aptitude tests where accurate interpretation must accompany fast calculation.

A460
B400
C420
D440
Correct Answer: 440Your Answer: D

Explanation

The complete calculation confirms 440 as the correct option. The question-specific working supplied in the record is: This compound interest solved example uses the step-by-step formula A = P(1 + R/100)^n, a reliable shortcut trick for annual compounding. Substituting P = 1000, R = 20, and n = 2 gives A = 1000(1.20)^2 = 1440. Compound interest equals amount minus principal, so CI = 1440 − 1000 = 440. The extra ₹40 arises from interest earned on the first year's ₹200 interest. Therefore, ₹440 is correct, matching option C.. The distractors 460, 400, 420 can result from interchanging cost price and selling price, treating discount as loss, adding successive rates, ignoring quantity, or rounding before the final step. This method preserves the numerical relationships in the stem and develops formula selection, percentage-base recognition and option elimination for SSC, Railway, Banking and other competitive aptitude examinations.

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FAQ

Profit and Loss FAQs

Common questions and clear answers for this topic.

Which method applies to this question?

Profit = SP − CP, Loss = CP − SP, and the percentage is calculated on cost price.

What is the verified answer?

440, option D.

Which percentage base is most important?

Profit or loss percent is based on cost price, while discount is based on marked price.

How can the answer be checked?

Reverse the percentage relation or assume a base of 100 and reconstruct the final value.

What is Profit and Loss in mathematics and what are the basic terms?

Profit and Loss is a key Quantitative Aptitude topic in SSC CGL, IBPS Bank PO, SBI PO, CAT, and Railway exams. Basic terms: Cost Price (CP) - price at which an item is purchased. Selling Price (SP) - price at which it is sold. Profit = SP - CP (when SP > CP). Loss = CP - SP (when CP > SP). Profit% = (Profit/CP) x 100. Loss% = (Loss/CP) x 100.

What is the difference between Marked Price, Selling Price, and Discount?

Marked Price (MP) is the price printed on the item before discount. Discount = MP - SP. Discount% = (Discount/MP) x 100. SP = MP x (100-Discount%)/100. If a shopkeeper marks up by 40% and gives 20% discount: SP = CP x 1.40 x 0.80 = 1.12CP = 12% profit. Profit% and Loss% are always calculated on Cost Price unless specified otherwise.

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