CAT 2021 Slot 1 QA Question 13: Anil invests some money at a fixed rate of interest, compounded annually. If the interests accrued during the second and third year are ₹ 806.25 and ₹ 866.72, respectively, the interest accrued, in IN

Question

Anil invests some money at a fixed rate of interest, compounded annually. If the interests accrued during the second and third year are ₹ 806.25 and ₹ 866.72, respectively, the interest accrued, in IN

Accepted Answer

In compound interest, the interest for each year is multiplied by the same growth factor.
So the annual growth factor is
$\dfrac{866.72}{806.25} \approx 1.075$
Therefore, the interest during the fourth year is approximately
$866.72 	imes 1.075 = 931.72$
So the nearest value is ₹931.72.

Answer: (4)

Anil invests some money at a fixed rate of interest, compounded annually. If the interests accrued during the second and third year are ₹ 806.25 and ₹ 866.72, respectively, the interest accrued, in INR, during the fourth year is nearest to