An amount of ₹2,00,000 is invested at 10% per annum compound interest. After 1 year, the investor withdraws ₹20,000 from the balance. What will be the total amount remaining in the account at the end of the 2nd year?
Show answer & explanation
Correct answer: B
Explanation
Principal = 200,000
Interest Rate = 10% per annum
Amount withdrawn after 1 year = 20,000
A = P (1 + R/100)
Amount after the first year (A₁) = 200,000 (1 + 10/100) = 220,000
Remaining balance after withdrawal = 220,000 − 20,000 = 200,000
Amount at the end of the second year (A₂) = 200,000 (1 + 10/100) = 220,000
Total Amount = ₹220,000