Mathematics for FinancePYQ Nov 18Question 1187 of 512
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How much will Rs. 25,000\displaystyle \text{Rs. }25,000 amount to in 2\displaystyle 2 years at compound interest if the rates for the successive years are 4%\displaystyle 4\% and 5%\displaystyle 5\% per year

Options

ARs. 27,300\displaystyle \text{Rs. }27,300
BRs. 27,000\displaystyle \text{Rs. }27,000
CRs. 27,500\displaystyle \text{Rs. }27,500
DRs. 27,900\displaystyle \text{Rs. }27,900
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Correct Answer

✅ Option a — Rs. 27,300\displaystyle \text{Rs. }27,300

All Options:

  • ARs. 27,300\displaystyle \text{Rs. }27,300
  • BRs. 27,000\displaystyle \text{Rs. }27,000
  • CRs. 27,500\displaystyle \text{Rs. }27,500
  • DRs. 27,900\displaystyle \text{Rs. }27,900

Detailed Solution & Explanation

**Derivation of Compound Interest Amount with Successive Rates** Given: - Principal (P\displaystyle P) = Rs. 25,000\displaystyle \text{Rs. }25,000 - Time (t\displaystyle t) = 2\displaystyle 2 years - Rate for year 1 (r1\displaystyle r_1) = 4%\displaystyle 4\% per annum - Rate for year 2 (r2\displaystyle r_2) = 5%\displaystyle 5\% per annum **Step 1: Set up the amount equation for successive rates** A=P(1+r1)(1+r2)A = P(1 + r_1)(1 + r_2) A=25000(1+4100)(1+5100)A = 25000\left(1 + \frac{4}{100}\right)\left(1 + \frac{5}{100}\right) **Step 2: Substitute values and calculate** A=25000×1.04×1.05A = 25000 \times 1.04 \times 1.05 A=26000×1.05=Rs. 27,300A = 26000 \times 1.05 = \text{Rs. }27,300 Hence, **Option A** is the correct answer.

Key Concepts to Understand

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods.

More Questions from Mathematics for Finance

A sum of money invested in compounded interest doubles itself in four years. In how many years it becomes 32 times of itself as the same rate of compound interest?

The simple interest on 600\displaystyle 600 for 9 months is 27\displaystyle 27. Find the interest rate.

Miss Liza lent 4,000\displaystyle 4,000 in such a way that some amount was given to Mr. A at 3%\displaystyle 3\% p.a. S.I. and rest amount to was given to B at 5%\displaystyle 5\% p.a. S.I., the annual interest from both is 144\displaystyle 144. Find the amount lent to Mr. A.

A certain sum of money was put at S.I. for 2.5\displaystyle 2.5 years at a certain rate of S.I. p.a. Had it been put at 4%\displaystyle 4\% higher rate, it would have fetched 500\displaystyle 500 more. Find the sum of money.

Rs.1,25,000\displaystyle 1,25,000 is borrowed at compound interest at the rate of 2%\displaystyle 2\% for the 1st year, 3%\displaystyle 3\% for the second year and 4%\displaystyle 4\% for the 3rd year. Find the amount to be paid after 3 years.

If Rs. 1,000\displaystyle \text{Rs. }1,000 be invested at interest rate of 5%\displaystyle 5\% and the interest be added to the principal every 10\displaystyle 10 years, then the number in years in which it will amount to Rs. 2,000\displaystyle \text{Rs. }2,000 is:

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