What sum of money at compound interest will amount to Rs. 30,051 in 3 years if the rate of interest is 5% in first years, 6% for the second year and 8% for the third year?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Rs. 25000
Formula used:
P × [(100 + R1)/100] × [(100 + R2)/100] × [(100 + R3)/100] = A
Where, P = principal, R = rate and A = amount
Calculations:
R1 = 5% = 1/20
R2 = 6% = 3/50
R3 = 8% = 2/25
Using equation (1), we get
Let the principal sum be x.
⇒ x × [(100 + 5)/100] × [(100 + 6)/100] × [(100 + 8)/100] = 30051
⇒ x × [(105)/100] × [(106)/100] × [(108)/100] = 30051
⇒ x × [(21)/20] × [(53)/50] × [(27)/25] = 30051
⇒ x × (30051/25000) = 30051
⇒ x = Rs 25000