Question 37
MediumOriginal questionA bank pays compound interest at 10% for the first year and 15% for the second year. What does a deposit of ₹20,000 amount to after 2 years?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
After year 1: ₹20,000 × 1.10 = ₹22,000.
After year 2: ₹22,000 × 1.15 = ₹25,300.
Worth noting
₹25,000 adds as simple interest. ₹25,312.50 uses the average rate 12.5% twice; with changing rates, multiply the year factors one by one.
- Concept
- Compound interest with a different rate each year
- Typical timeTypical
- 50 s
- Your timeYours
- —
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