Question

$Rs.100000$ was invested by Mohan in a fixed deposit $@10\%$ per annum at CI. However every year he was to pay $20\%$ tax on the compound interest. How much money does Mohan has after $3$ years ?

• A. $Rs.128414$
• B. $Rs.108000$
• C. $Rs.126079.2$
• D. $Rs.12971.2$

Answer 1

The correct option is D $Rs.12971.2$

Interest after 1st year =$\frac{100000\times 10}{100}=10000$Rs
Tax on interest =$\frac{10000\times 20}{100}=2000$Rs
Amount after deduct Tax =100000+10000-2000=108000 Rs
Interest after 2nd year=$\frac{108000\times 10}{100}=10800$Rs
Tax on interest Rs 10800=$\frac{10800\times 20}{100}=2160$Rs
Amount after deduct Tax=108000+10800-2160=116640 Rs
Interest After 3rd year =$\frac{116640\times 10}{100}=11664$Rs
Tax on 11664=$\frac{11664\times 20}{100}=2332.80$Rs
Amount after deduct tax =116640+11664-2332.80=12971.20 Rs