Compound growth of a deposit — Aptitude Question
Compound growth of a deposit: A deposit of ₹6,250 grows at 4% per annum compound interest. Answer and worked solution on CodeKairo.
- Topic: Simple & Compound Interest
- Section: Quantitative Aptitude
- Difficulty: Medium
- Time target: 60 seconds
Question
A deposit of ₹6,250 grows at 4% per annum compound interest. What is the amount after 2 years?
Options
- ₹6,500
- ₹6,760
- ₹6,800
- ₹6,900
Show the answer and the worked solution
Correct answer: B. ₹6,760
Worked solution
- 1.04² = 1.0816.
- Amount = 6,250 × 1.0816 = ₹6,760.
- Check: 6,250 → 6,500 → 6,760. ✓
Answer: ₹6,760.
The idea
Stepping year by year is often faster than squaring the multiplier, and it produces a natural check on the arithmetic.
Shortcut. 4% is a factor of 26/25 and 6,250 = 625 × 10, so the amount is 10 × 26² = ₹6,760 with no decimals.
Common trap. ₹6,500 — stopping after the first year's growth (6,250 + 250); the second year adds 4% of 6,500 = ₹260.
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