Question

Deepak invested Rs. 50000 in a bond which was giving him $10\%$ interest per annum at compound interest. Find the money received by Deepak after 3 years if he has to pay $20\%$ tax on the compound interest every year.

• A. Rs. 68987.3
• B. Rs. 59852
• C. Rs. 67892.5
• D. Rs. 65452
• E. Rs. 62985.6

Answer 1

The correct option is E Rs. 62985.6

Deepak was getting $10\%$ interest, $20\%$ of the interest i.e. $20\%$ of $10\%$ $(=2\%)$ was the tax which he had to pay, so the net interest rate (after tax) $=10-2=8\%$

So, amount received by him after 3 years $=50000{(1+(\frac{8}{100}\left)\right)}^3=Rs.62985.6$

Hence option (5)

2nd method:- By, pascal triangles for $n=3\&r=8\%$. Option (5).