How much will Rs. 50,000 amount to in 3 years, compounded yearly, if the rates for the successive years are 6%, 8% and 10% respectively?

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answer is A.

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Detailed Solution

Concept- Interest is compounded in this case. In order to compute the compound interest for the first year, multiply the principal amount of 50,000 by the interest rate of 6% to get the value x. Then, for the second year, x will be the principal amount and y will be the resultant amount, with x being the principal and y being the second year's interest rate of 8%. Y will be the principal sum and the interest rate will be 10% for the third year. Find the amount at the conclusion of the third year in this method.
Compound interest at the end of 1 st year is
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For the second year, the above resulting amount will be the principal amount and

.
Compound interest at the end of 2 nd year is
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For the third year, the above resulting amount will be the principal amount and

.
Compound interest at the end of 3rd year is
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Hence, the correct answer is option 1.

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