Question

UCO bank offers an interest of 10% per annum compounded annually. Karan deposits Rs. 45,000 under this scheme and at the end of the tenure he receives Rs. 59,895. What was the tenure of the schemes that Karan had chosen?
1. 2 years
2. 5 years
3. 3 years
4. 4 years

Answer 1

Correct Answer - Option 3 : 3 years

Given

Rate = 10% per annum

Principal = Rs. 45,000

Amount = Rs. 59,895

Formula used

A = P[1 + r%]^t

Where A, P, r and t are Amount, Principal, Rate and Tine respectively

Calculation

59,895 = 45000[1 + (10/100)]^t

⇒ 59,895/45,000 = (110/100)^t

⇒ 1331/1000 = (11/10)^t

⇒ (11/10)³ = (11/10)^t

⇒ t = 3 

∴ Time is 3 years