alleryThe amount payable after 2 years on Rs.4000 at 5% per annum compounded annually is
ARs.4400
BRs.4300
CRs.4410
DRs.4500
Answer & Solution
Correct answer: C. Rs.4410
1. A = P(1 + r)^n = 4000 * (1.05)^2.
2. (1.05)^2 = 1.1025.
3. A = 4000 * 1.1025 = 4410.
4. So amount payable is Rs.4410.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.8_
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