Question

An investor invested Rs. 5 lakhs in Company Q in 1996. After one year, the entire amount along with the interest was transferred as investment to Company P in 1997 for one year. What amount will be received from Company P, by the investor?

• A. Rs. 5,94,550
• B. Rs. 5,80,425
• C. Rs. 5,77,800
• D. Rs. 5,77,500

Answer 1

The correct option is B Rs. 5,80,425

Amount received from Company Q after one year on investment of Rs. 5 lakhs in the year 1996
= Rs. [5 + (6.5% of 5)] lakhs
= Rs. 5.325 lakhs.
Amount received from Company P after one year on investment of Rs. 5.325 lakhs in the year 1997
= Rs. [5.325 + (9% of 5.325)] lakhs
= Rs. 5.80425 lakhs
= Rs. 5,80,425.