DRDO Multi tasking staff Model paper 3

Amount at the end of first year = P + PRT/100 = 1000 + (1000 × 1 × 4)/100 = Rs. 1040
The formula for CI at annual compound interest, including principal sum, is: CI=P(1+

r

100

)t−P
Where:
CI = Compound Interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
t = the number of years the money is invested or borrowed
CI = 1040(1 + 4/100)‌2 - 1040
CI = Rs. 84.864
Total interest = 84.864 + 40 = Rs. 124.864 ≈ Rs. 125