Question 3
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An investor invested ₹ 5 lakhs in Company Q in 1996. After one year, the entire amount along with the interest was transferred as investment to Company P in 1997 for one year. What amount will be received from Company P, by the investor?
- A ₹ 5,94,550
- B ₹ 5,80,425 Correct
- C ₹ 5,77,800
- D ₹ 5,77,500
Correct Answer: Option B
Amount received from Company Q after one year on investment of ₹ 5 lakhs in the year 1996
= ₹ [5 + (6.5% of 5)] lakhs
=₹ 5.325 lakhs.
Amount received from Company P after one year on investment of ₹ 5.325 lakhs in the year 1997
= ₹ [5.325 + (9% of 5.325)] lakhs
= ₹ 5.80425 lakhs
= ₹ 5,80,425.
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