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    Question

    A person invests ₹20,000 in a scheme that offers 8%

    compound interest annually. How much will the investment grow to after 3 years?
    A ₹25,194 Correct Answer Incorrect Answer
    B ₹26,000 Correct Answer Incorrect Answer
    C ₹27,000 Correct Answer Incorrect Answer
    D ₹28,000 Correct Answer Incorrect Answer

    Solution

    The formula for compound interest is: Amount = P(1 + r/n)^(nt) Where: P = principal amount = ₹20,000 r = annual interest rate = 8% = 0.08 t = time in years = 3 years n = number of times interest is compounded annually = 1 Substitute the values: Amount = 20000(1 + 0.08)^3 Amount = 20000(1.08)^3 Amount = 20000 × 1.2597 Amount ≈ ₹25,194 Correct Option: a) ₹25,194

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