Question

₹ 45000 is deposited at compound interest for 4 years. The rates are 6% (1st year), then increase by 1% each year (so 7%, 8%, 9%). Find the approximate amount at the end of 4 years.

• A. 60000
• B. 70000
• C. 80000
• D. 90000

Hint:

For varying yearly rates, multiply sequential growth factors $(1+r_i)$; rounding the final factor gives a quick estimate.

Answer 1

The Correct Option is A

Amount $=P(1+0.06)(1+0.07)(1+0.08)(1+0.09)$.
So, $A=45000\times1.06\times1.07\times1.08\times1.09 \approx 45000\times1.335 \approx ₹ 6.01\times10^4$.
\(⇒\) Approximately ₹ 60000.