Suppose ₹X is invested, and after 2 years at 5% simple interest, it yields ₹Y interest. If ₹Y is then invested for 2 years at 5% simple interest, it yields ₹Z interest. Which of the following is true?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. Y2 = XZ.
SI = (P × R × T)/100
Y = (X × 5 × 2)/100 = X/10
⇒ Y/X = 1/10
Z = (Y × 5 × 2)/100 = Y/10
⇒ Z/Y = 1/10
So, Y/X = Z/Y ⇒ Y2 = XZ