Question : What will be the amount received on Rs. 25000 at the rate of 20% per annum compounded yearly for 4 years?
Option 1: Rs. 51840
Option 2: Rs. 50350
Option 3: Rs. 53550
Option 4: Rs. 48750
Correct Answer: Rs. 51840
Solution :
Given: Principal, P = Rs. 25000
Rate of interest, $R$ = 20%
Time, $T$ = 4 years
Now, A = P$(1+\frac{R}{100})^T$, where P is principal, $R$ is the rate of interest compounded annually for $T$ years.
⇒ A = 25000$(1+\frac{20}{100})^4$
= 25000$(\frac{6}{5})^4$
= 25000$×\frac{6}{5}×\frac{6}{5}×\frac{6}{5}×\frac{6}{5}$
= 25000$×\frac{1296}{625}$
= 51840
Hence, the correct answer is Rs. 51840.
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