Question
What will be the net CI on Rs. 2000 for 4 years at 40%
p.a compounded annually?Solution
Net CI for 2 years = 40 + 40 + (40 x 40/100) = 96% So Net CI for 4 years = 96 + 96 + (96 x 96/100) = 192 + 92.16 = 284.16% Hence net CI = 284.16% of Rs. 2000 = Rs. 5683.2
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