Multiple choice

Under a new scheme, a bank offers an interest of 30% per annum compounded annually. Suraj deposits Rs. 10,000 under this new scheme and at the end of the tenure receives Rs. 28,561. What is the tenure of the scheme that Suraj has chosen?

  1. 2 years

  2. 3.5 years

  3. 4 years

  4. 4.5 years

  5. NA
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The formula for compound interest is A = P(1 + r/100)^n. Substituting the values, 28561 = 10000(1 + 0.30)^n, which simplifies to 2.8561 = (1.3)^n. Since 1.3^4 = 2.8561, the tenure is 4 years.

AI explanation

Using the compound interest formula, Amount equals Principal multiplied by the quantity (1 plus Rate divided by 100) raised to the power of time. We substitute the values to get 28561 equals 10000 multiplied by 1.3 raised to the power of time. Solving this equation, the quantity 1.3 raised to the power of time equals 2.8561, which means the time is 4 years.

Keep practicing — related questions