Question

Shubham gets an increment of 11% in his salary every year. Find his salary after two years if his present salary is Rs. 50,000. 
1. Rs. 60,500
2. Rs. 59,405
3. Rs. 62,270
4. Rs. 61,605

Answer 1

Correct Answer - Option 4 : Rs. 61,605

Given: 

Annual increment in salary = 11%

Present salary = Rs. 50,000

Formula Used:

If a quantity increases/decreases at the rate of ‘R%’ per unit time, then the new quantity after time ‘n’ will be,

Q_new = Q_original ­× {(100 ± R)/100}ⁿ

where,

Q_original = Original quantity

Q_new = Quantity after increase decrease

R = Rate of Increase/Decrease of quantity

n = Time

Calculation:

According to the question,

The new salary of Shubham after 2 years,

Q_new = Q_original ­× {(100 + R)/100}ⁿ

⇒ Q_new = 50,000 × {(100 + 11)/100}²

⇒ Q_new = 50,000 × (111/100) × (111/100)

⇒ Q_new = 50,000 × (12321/10000)

⇒ Q_new = 5 × 12321

⇒ Q_new = 61,605

∴ The new salary of Shubham after 2 years will be Rs. 61,605.