A father deposited ₹60,000 in a compound interest scheme for his son's business when his son was 20 years old. The scheme offers 15% compound interest per annum compounded annually. What will be the total amount his son will receive when he turns 24?
Show answer & explanation
Correct answer: A
Explanation
Given:
Principal (P) = ₹60,000
Interest rate (R) = 15% per annum
Time (T) = 4 years
By the formula:
A = P (1 + R/100)(1 + R/100)(1 + R/100)(1 + R/100)
A = 60,000 × (1 + 15/100) × (1 + 15/100) × (1 + 15/100) × (1 + 15/100)
= 60,000 × 1.15 × 1.15 × 1.15 × 1.15
= 60,000 × 1.3225 × 1.15 × 1.15
= 60,000 × 1.520875 × 1.15
= 60000 × 1.74900625
= ₹1,04,940.38