In what time will ₹3,20,000 amount to ₹4,05,000 if compounded at 12.5% per annum?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 2 years.
A = P(1 + R/100)n
⇒ 405000 = 320000(1 + 12.5/100)n
⇒ 405 = 320(1 + 1/8)n
⇒ (9/8)n = 405/320 = 81/64 = (9/8)2
⇒ n = 2
Hence, the time required is 2 years.