Question

will amount to ₹1155 in two years, if the compound rates of interest for successive years are $5\%$ and $10\%$respectively?

• A. ₹1000
• B. ₹800
• C. ₹900
• D. ₹850

Answer 1

The correct option is A ₹1000

Let the principal amount be P.
Formula for the calculation of amount to be paid for successive rate of interest is :
$A=Principal\times \frac{100+R_1}{100}\times \frac{100+R_2}{100}$
On using above formula, the amount after 2 years is:
$1155=P\times \frac{100+5}{100}\times \frac{100+10}{100}$

$1155=P\times \frac{105}{100}\times \frac{110}{100}$
$\Rightarrow 1155=1.155P$
$\Rightarrow P=₹1000$