Question : Basanthi deposited INR 50,000 in a co-operative bank which is giving compound interest at the rate of 10% per annum. What will be her interest in the 3rd year?
Option 1: INR 66,550
Option 2: INR 6,050
Option 3: INR 5,050
Option 4: INR 10,050
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Correct Answer: INR 6,050
Solution :
Principal sum = INR 50000
Rate = 10% per annum compounded annually
Interest in first year = 10% of 50000 = 5000
Amount after one year = 55000
Interest in second year = 10% of 55000 = 5500
Amount after two years = 55000 + 5500 = 60500
Interest in third year = 10% of 60500 = 6050
Hence, the correct answer is INR 6050.
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