Daljit received a sum of Rs. 40000 as a loan from a finance company. If the rate of interest is 7% per annum compounded annually, calculate the compound interest that Daljit pays after 2 years.
Given,
Principal = Rs.40000
Rate of interest = 7 %
Time = 2 years
Hence,
Compound interest =
=
So,
Compound interest paid by Daljit = Rs.5796