What amount will be paid after 3 years?

25,000  is borrowed at compound interest at the rate of 3% for the first year, 4% for the second year and 5% for the third year. The amount to be paid after 3 years is :

  1. Rs. 28117
  2. Rs. 28119
  3. Rs. 28121
  4. Rs. 28132
Anurag Mishra Professor Asked on 9th January 2016 in Maths.
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  • 1 Answer(s)

    Answer: (2) Rs. 28119

    Solution:-
    Principal = Rs. 25, 000, rate = 3%

    Then, the principal of second year = 25, 000(1 + 3/100)
    = 25, 000 (103/100)
    = 25, 000 x 103/100
    = 250 x 103
    = Rs. 25, 750

    Rate = 4%,

    Then, the principal for third years = 25, 750 (1 + 4/100)
    = 25, 750 (1 + 1/25)
    = 25, 750 x 26/25
    = 1030 x 26
    = Rs. 26, 780

    Rate = 5%
    So, the amount to be paid after 3 years = 26, 780 (1 + 5/100)
    = 26, 780 (1 + 1/20)
    = 26, 780 (21/20)
    = 26, 780 x 21/20
    = Rs.28119

    Then, the amount to be paid after 3 years is Rs. 28119.

    Hence, the correct answer is option (2) Rs. 28119.

    Anurag Mishra Professor Answered on 10th January 2016.
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