The amount to which ₹5000 will accumulate at the effective rate of 4% for 4 years and 5% for 2 years is
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹6448 **
Formula:
$A = P(1+r_{1})^{t_{1}}(1+r_{2})^{t_{2}}$
Where:
$P = 5000$
$r_{1} = 0.04,\ t_{1} = 4$
$r_{2} = 0.05,\ t_{2} = 2$
So,
$A = 5000(1.04)^{4}(1.05)^{2}$
$A = 5000 \times 1.16985856 \times 1.1025$
$A \approx 6448.85$