If the rate of interest is 20% per annum, compounded yearly and the interest on a certain sum in the second year is ₹250, then what will be the interest on the same sum in the fifth year?
Answer & explanation
Correct answer: option 4
Compound interest of 2nd year = 250
Rate of interest = 20%
Compound interest of 3rd year = 250 × \(\frac{6}{5}\) = 300
Compound interest of 4th year = 300 × \(\frac{6}{5}\) = 360
Compound interest of 5th year = 360 × \(\frac{6}{5}\) = 432