Compound Interest Practice Test 5

Question : 26 of 40

Marks: +1, -0

Find the interest at the end of 1 year if a man invested Rs 35 lakh at 6% CI per annum if the income tax at 12.5% on the interest is deducted at the end of the year.

Rs 1,38,750
Rs 1,83,750
Rs 1,88,570
Rs 1,85,750
Rs 1,58,570

Validate

Solution:

Actual interest rate on a sum of money

=({100-12.5}/100)×6/100×100=5.25%

Amount

=P(1+r/100)^t

=3500000(1+5.25/100)^1

=3500000×421/400=3683750

Interest = Amount - P = 36,83,750 - 35,00,000 = 1,83,750

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