Multiple choice

Rs. 240000 is taken as a loan for three year compounded annually at 12.5% per annum. At the end of the first year, the interest is revised to 12 % per annum. The total amount to be repaid at the end of the three year is ?

  1. Rs.326400

  2. Rs.334800

  3. Rs.338688

  4. Rs.342648
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

After year 1 at 12.5%: 240000 × 1.125 = 270000. Year 2 at 12%: 270000 × 1.12 = 302400. Year 3 at 12%: 302400 × 1.12 = 338688. The key is applying different rates for different years.

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