In the statements below study the question asked and decide which of the following statement is/are necessary to answer the question:
Find the present salary of Arvind:
I. The salary increases every year by 15%
II. The salary at the time of joining was ₹18,000
III. He has joined the company exactly 10 years ago.
Which statement(s) are necessary.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → all I, II, and III necessary
A salary that rises by a fixed per cent every year grows like compound interest: present salary = starting salary \(\times\,(1+\text{rate})^{\text{years}}\). All three quantities in this formula are needed.
Statement I gives the rate of increase, 15% a year.
Statement II gives the starting salary, ₹18,000.
Statement III gives the number of years, 10.
Leaving out any one statement leaves one quantity unknown, so the present salary, \(18000\times(1.15)^{10}\), can be found only with all three.