Correct Answer - Option 5 :
Rs. 2047.5
Calculation:
Principal = Rs. 100
Rate of Interest for 1st month = 6%
Interest = 6/12
Interest for second month = 12/12
The interest earned for the successive months is in the form of geometric progression.
Rs. 6/12, Rs. 12/12, Rs. 24/12 ……
a = Rs. 6/12, r = (12/12)/ (6/12) = 2, where a is the first term and r is the common ratio of the series
∴ Sum of series = a(rn - 1)/r – 1
⇒ 6/12(212 - 1)/2 – 1
⇒ ½(4096 – 1)
⇒ Rs. 2047.5
The total amount of interest earned at the end of one year is Rs. 2047.5.