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Solve the following question and mark the best possible option.
Miss Sheetal received Rs. 1 crore as retirement benefits when she retired as the CEO of a marketing firm. She has a choice between depositing the money in her savings account that gives her simple interest at 10% per annum or depositing the money in a fixed deposit that gives her compound interest at the same rate. She calculates that the difference between the simple and compound interest for three years is Rs. 310,000 and decides to invest her money in the fixed deposit for 4 years. What will be the difference between the interest for the third year and the fourth year?
  • a)
    Rs. 641,000
  • b)
    Rs. 1,000,000
  • c)
    Rs. 1,331,000
  • d)
    Rs. 121,000
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
Solve the following question and mark the best possible option.Miss Sh...
At 10%, the interest for the 1st year is 1,000,000.
So, the principal for the 2nd year is ₹ 11,000,000.
At 10%, the interest for the 2nd year is ₹ 1,100,000.
So the principal for the 3rd year is ₹ 12,100,000.
At 10%, the interest for the 3rd year is ₹ 1,210,000.
So, the principal for the 4th year is ₹ 13,310,000.
At 10% the interest for the 4th year is ₹ 1,331,000.
So, the difference between the interest for the 4th year and the 3rd year is ₹ 1331000 - 1210000 = ₹ 121,000
Hence, the answer is option D
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Most Upvoted Answer
Solve the following question and mark the best possible option.Miss Sh...
Explanation:
To solve this question, let's break it down into smaller steps.

Step 1: Calculate the simple interest for 3 years:
We are given that the difference between the simple and compound interest for 3 years is Rs. 310,000. This means that the compound interest earned for 3 years is Rs. 310,000 more than the simple interest earned for the same period.

Let's assume the simple interest earned for 3 years is SI.

According to the given information, the compound interest earned for 3 years is SI + Rs. 310,000.

We can use the formula for compound interest: CI = P(1 + r/n)^(nt) - P, where P is the principal amount, r is the rate of interest, n is the number of times interest is compounded per year, and t is the time period in years.

In this case, the principal amount is Rs. 1 crore, the rate of interest is 10% per annum, and the time period is 3 years.

So, the compound interest for 3 years is given by CI = 1,00,00,000(1 + 0.10/1)^(1*3) - 1,00,00,000 = 1,00,00,000(1.10)^3 - 1,00,00,000 = 1,33,10,000 - 1,00,00,000 = 33,10,000.

Therefore, SI + 3,10,000 = 33,10,000.

Solving for SI, we get SI = 33,10,000 - 3,10,000 = 30,00,000.

So, the simple interest earned for 3 years is Rs. 30,00,000.

Step 2: Calculate the compound interest for 4 years:
We know that the principal amount is Rs. 1 crore, the rate of interest is 10% per annum, and the time period is 4 years.

Using the compound interest formula, CI = P(1 + r/n)^(nt) - P, where P is the principal amount, r is the rate of interest, n is the number of times interest is compounded per year, and t is the time period in years.

In this case, CI = 1,00,00,000(1 + 0.10/1)^(1*4) - 1,00,00,000 = 1,00,00,000(1.10)^4 - 1,00,00,000 = 1,46,41,000 - 1,00,00,000 = 46,41,000.

So, the compound interest earned for 4 years is Rs. 46,41,000.

Step 3: Calculate the difference between the interest for the third year and the fourth year:
The difference between the interest for the third year and the fourth year is the compound interest earned for the fourth year minus the compound interest earned for the third year.

So, the difference = Compound interest for the fourth year - Compound interest for the third year = Rs. 46,41,000 - Rs. 33,10,000 = Rs. 13,31,000.

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Solve the following question and mark the best possible option.Miss Sheetal received Rs. 1 crore as retirement benefits when she retired as the CEO of a marketing firm. She has a choice between depositing the money in her savings account that gives her simple interest at 10% per annum or depositing the money in a fixed deposit that gives her compound interest at the same rate. She calculates that the difference between the simple and compound interest for three years is Rs. 310,000 and decides to invest her money in the fixed deposit for 4 years. What will be the difference between the interest for the third year and the fourth year?a)Rs. 641,000b)Rs. 1,000,000c)Rs. 1,331,000d)Rs. 121,000Correct answer is option 'D'. Can you explain this answer?
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Solve the following question and mark the best possible option.Miss Sheetal received Rs. 1 crore as retirement benefits when she retired as the CEO of a marketing firm. She has a choice between depositing the money in her savings account that gives her simple interest at 10% per annum or depositing the money in a fixed deposit that gives her compound interest at the same rate. She calculates that the difference between the simple and compound interest for three years is Rs. 310,000 and decides to invest her money in the fixed deposit for 4 years. What will be the difference between the interest for the third year and the fourth year?a)Rs. 641,000b)Rs. 1,000,000c)Rs. 1,331,000d)Rs. 121,000Correct answer is option 'D'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about Solve the following question and mark the best possible option.Miss Sheetal received Rs. 1 crore as retirement benefits when she retired as the CEO of a marketing firm. She has a choice between depositing the money in her savings account that gives her simple interest at 10% per annum or depositing the money in a fixed deposit that gives her compound interest at the same rate. She calculates that the difference between the simple and compound interest for three years is Rs. 310,000 and decides to invest her money in the fixed deposit for 4 years. What will be the difference between the interest for the third year and the fourth year?a)Rs. 641,000b)Rs. 1,000,000c)Rs. 1,331,000d)Rs. 121,000Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Solve the following question and mark the best possible option.Miss Sheetal received Rs. 1 crore as retirement benefits when she retired as the CEO of a marketing firm. She has a choice between depositing the money in her savings account that gives her simple interest at 10% per annum or depositing the money in a fixed deposit that gives her compound interest at the same rate. She calculates that the difference between the simple and compound interest for three years is Rs. 310,000 and decides to invest her money in the fixed deposit for 4 years. What will be the difference between the interest for the third year and the fourth year?a)Rs. 641,000b)Rs. 1,000,000c)Rs. 1,331,000d)Rs. 121,000Correct answer is option 'D'. Can you explain this answer?.
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