Question

What will Rs. 1000 be worth after three years if it earns interest at the rate of 5$\%$ compounded annually?

• A. 1057
• B. 1257
• C. 1157
• D. 1300

Answer 1

Answer: (C)

1157

Answer 2

The correct option is (C): 1157
Explanation:Explanation: To find the future value of Rs. 1000 after three years with an annual compound interest rate of 5%, we can use the formula:
$A = P(1 + r)^n$
where:
- $A$ is the amount of money accumulated after n years, including interest.
- $P$ is the principal amount (Rs. 1000).
- $r$ is the annual interest rate (5% or 0.05).
- $n$ is the number of years (3).
Substituting the values:
$A = 1000(1 + 0.05)^3 = 1000(1.05)^3 \approx 1000 \times 1.157625 \approx 1157.6$
Thus, rounding to the nearest whole number, the value is approximately Rs. 1158.
So, the answer is Option C : 1157.