Multiple choice

Find the sum, invested at 10% compounded annually, on which the interest for the third year exceeds the interest of the first year by Rs. 252.

  1. $Rs. 10,000$
  2. $Rs. 12,000$
  3. $Rs. 14,000$
  4. $Rs. 16,000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let P be the principal. Interest for the first year is 0.1P. Interest for the third year is P(1.1)^3 - P(1.1)^2 = 0.121P. The difference is 0.121P - 0.1P = 0.021P. Setting 0.021P = 252 gives P = 12,000.

AI explanation

The interest for the first year is 10 percent of the principal, and the interest for the third year is the amount after two years multiplied by 10 percent, which equals P multiplied by 1.10 squared multiplied by 0.10. The difference is P multiplied by 0.121 minus P multiplied by 0.10, equalling 0.021P. Setting 0.021P equal to 252 gives P equals Rs. 12,000.

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