Multiple choice

Vikram needs to convert his purchases into monthly installments. The company uses a model where the interest is compounded annually and it increases with the years. For the first year, it is 20% and then, it doubles each subsequent year. If he has made purchases worth Rs. 1,50,000, then what amount will he have to pay in 2 years?

  1. Rs. 2,52,000

  2. Rs. 2,54,000

  3. Rs. 2,56,000

  4. Rs. 2,58,000

  5. Na
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Year 1 interest is 20%. Year 2 interest doubles to 40%. Amount after 2 years = 150,000 * (1 + 0.20) * (1 + 0.40) = 150,000 * 1.2 * 1.4 = 150,000 * 1.68 = 252,000.

AI explanation

Using the compound interest formula where the principal is 150000, the first year interest is 20% and the second year interest doubles to 40%, the first year amount becomes 150000 times 1.20 which is 180000. For the second year, applying the 40% interest to 180000 gives a final amount of 180000 times 1.40, which equals 252000.

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