Multiple choice

Rs. 2,40,000 is taken as loan for three years compounded annually at 12.5% p.a. At the end of first year, the interest is revised to 12% p.a. The total amount to be repaid at the end of third year is:

  1. Rs. 3,26,400

  2. Rs. 3,34,800

  3. Rs. 3,38,688

  4. Rs. 3,42,648
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Year 1 amount: 240000 * 1.125 = 270000. Year 2 amount: 270000 * 1.12 = 302400. Year 3 amount: 302400 * 1.12 = 338688.

AI explanation

The amount after the first year is 240000 * 1.125, which equals 270000. The revised interest rate of 12% applies for the second and third years. The final amount after three years is 270000 * 1.12 * 1.12, which equals 338688. The total amount to be repaid is Rs. 3,38,688.

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