AFCAT Model Paper 8

Given:
Principal = Rs. 50,000
Rate for the first year = 5%
Rate for the second year = 4%
Rate of the third year = 2%
Formula:
A=P(1+

R1

100

)(1+

R2

100

)(1+

R3

100

)
Where, A= Amount, P= principal, R1= Rate for first year, R2= Rate for second year and R3= Rate for third year
Calculation:
A=50,000×(

105

100

)×(

104

100

)×(

102

100

)
⇒A=50,000×(

21

20

)×(

26

25

)×(

51

50

)
⇒ A = 55692
Hence, CI = 55692 – 50,000 = Rs. 5692