Multiple choice

Sudhir deposited Rs. 500 in a bank and got Rs. 583.20 in 2 years compounded annually. How much would he get after a year, if the rate of interest is increased by 2%?

  1. Rs. 540

  2. Rs. 550

  3. Rs. 545

  4. Rs. 510

  5. Rs. 530
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

First, find the original interest rate using the compound interest formula: 583.20 = 500 * (1 + R/100)^2, which gives R = 8%. Increasing this rate by 2% results in a new rate of 10%. The amount Sudhir would get after 1 year at 10% simple or compound interest is 500 * 1.10 = Rs. 550.

AI explanation

Using the compound interest formula, the rate for the initial deposit is found by 500 * (1 + R / 100)^2 = 583.20, meaning (1 + R / 100)^2 = 1.1664 and the original rate R is 8%. With a 2% increase, the new rate becomes 10%, so the amount after one year is 500 * (1 + 10 / 100)^1 = Rs. 550.

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