An amount of ₹10,000 becomes ₹12,100 in 2 years at a certain interest rate compounded annually. Find the amount after 4 years.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. ₹14,641.
A = P(1 + R/100)T
where, A = Amount, P = Principal, R = rate, and T = Time
⇒ 12100 = 10000(1 + R/100)2
⇒ 121/100 = (1 + R/100)2
⇒ 11/10 = (1 + R/100)
⇒ 11/10 - 1 = R/100
⇒ 1/10 = R/100
⇒ R = 10%
Amount after 4 years
⇒ A = 10000(1 + 10/100)4
⇒ A = 10000(1 + 1/10)4
⇒ A = 10000(11/10)4
⇒ A = 10000 × 14641/10000
⇒ A = Rs.14641