Find the amount of Rs. 12500 for 2 years compounded annually, the rate of interest being $15 %$ for the first year and $16 %$ for the second year.

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Rs.16917

Rs.16675

Rs.16871

Rs.156675

answer is A.

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Detailed Solution

Given,

Principal (P) = Rs 12500 Rate for first year, R 1 = 15 ​ ​ % ​ ​ p .a and Rate for the second year, R 2 = 16 ​ ​ % ​ ​ p .a Time (T) = 2 year

The formula to calculate the amount is given by

A = P 1 + R 1 100 1 + R 2 100 ⋅ ⋅ ⋅ ⋅ ⋅ ⋅ (1)

Substitute the given value in equation (1) and solve for amount A,

⇒ A = 12500 1 + 15100 1 + 16100 ⇒ A = 1000 1.15 1.16 ⇒ A = Rs 16675

Hence, the amount after two years is Rs 16675.
Hence, the correct option is 1.

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