The price of an item increases annually by 5% from 400. What will be the estimated price at the end of the fourth year?
Show answer & explanation
Correct answer: B
Explanation
Initial Price = 400
Growth Rate = 5% per annum
Time = 4 years
According to the formula:
New Price = P(1 + r/100)^n
= 400(1.05)^4
= 400 × 1.2155
= ₹486.2