Question

The rate of inflation was 1000%. Then what will be the cost of an article, which costs 6 units of currency now, 2 years from now?

• A. 666
• B. 660
• C. 720
• D. 726

Hint:

An inflation rate of X% means multiplying the price by \(1 + \frac{X}{100}\) for each year compounde(d)

Answer 1

The Correct Option is C

Inflation rate = 1000% means price increases 10 times the original amount each year. Let current price = 6. After 1 year: \[ \text{Price} = 6 \times (1 + 10) = 6 \times 11 = 66 \] After 2 years: \[ \text{Price} = 66 \times 11 = 726 \] Wait — checking 1000% inflation: If it’s truly 1000%, then factor = \( 1 + \frac{1000}{100} = 11 \). Thus correct result is: \[ 6 \times 11 \times 11 = 726 \] Hence, correct answer is actually (d) 726.