Multiple choice

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Directions: Study the given information and answer the following question. A loan disbursement company offers different loan interest rates based on types of customers. The following table provides the details: Name Type of interest Principal Amount Year Rate (%) Low income group Compound Rs. 10,000 4 Females Simple Rs. 2,95,000 3 Senior citizens Compound Rs. 20,000 2 3 Students Simple 4 Persons with army background Compound 5 2

What is the amount for senior citizens if the interest is compounded yearly for 2 years?

  1. Rs. 19,165.7

  2. Rs. 20,320.9

  3. Rs. 21,218

  4. Rs. 22,418

  5. Rs. 25,300.5
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C Correct answer
AI explanation

Using the compound interest formula A = P(1 + R/100)^T, we substitute the values from the table for senior citizens where the principal is Rs. 20,000, the rate is 3%, and the time is 2 years. This gives the calculation as 20000 * (1 + 3/100)^2, which simplifies to 20000 * 1.03 * 1.03. Multiplying these values results in an amount of Rs. 21,218.

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