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Q:
A) Rs.5624.32 | B) Rs.5423 |
C) Rs.5634 | D) Rs.5976 |
Answer: A) Rs.5624.32
Explanation:
Explanation:
5% is the rate of interest. 20% of the interest amount is paid as tax.
i.e 80% of the interest amount stays back.
if we compute the rate of interest as 80% of 5% = 4% p.a., we will get the same value.
The interest accrued for 3 years in compound interest = 3 x simple interest on principal + 3 x interest on simple interest + 1 x interest on interest on interest.
= 3 x (200) + 3 x (8) + 1 x 0.32 =600 + 24 + 0.32 = 624.32
The amount at the end of 3 years = 5000 + 624.32 = 5624.32