Multiple choice

XYZ Bank Ltd has a policy of continuous compounding of fixed deposits. Ashutosh has deposited Rs. 60,000 at the interest rate of 12 percent for 3 years. How much would his deposit grow up to at the end of the term?

  1. 85,068.81

  2. 86,739.8

  3. 77,047.12

  4. 85,999.97
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Continuous compounding formula is A = P × e^(rt). Here, P=60000, r=0.12, t=3 years. A = 60000 × e^(0.36) = 60000 × 1.433329 = 85999.74 (approximately). The closest match is Rs. 85,999.97, which accounts for precise calculation.

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