Multiple choice

Emily deposits a certain sum of money in a savings account that offers an annual fixed interest rate, compounded annually. After the third year, she earns an interest of Rs. 1,210, and after the fourth year, she receives an interest of Rs. 1,331. Determine the interest she will earn, during the second year, rounded to the nearest whole number.

  1. Rs. 860

  2. Rs. 980

  3. Rs. 1,000

  4. Rs. 1,100

  5. a
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D Correct answer
AI explanation

The interest for the fourth year is the third year interest multiplied by (1 + r/100), so 1331 = 1210(1 + r/100), which yields r = 10 percent. Therefore, the second year interest is the third year interest divided by 1.1, giving 1210 / 1.1 = 1100. The interest she will earn during the second year is Rs. 1,100.

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