If SI on a certain sum of money at 4% per annum for 2 years

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If SI on a certain sum of money at 4% per annum for 2 years be ₹ 125, what would be the interest if it was to be compounded annually at the same rate and for the same time period?

1. ₹ 127.50
2. ₹ 125.50
3. ₹ 135.50
4. ₹ 138

Correct Option: A

Given in question , SI = ₹ 125 , r = 4% , t = 2 years
Using the given formula ,

CI	=	100 × 51
125	=	4 × 2 × 625

CI =	100 × 51 × 125	= ₹ 127.5.
	4 × 2 × 625