Akshat deposited a sum of ₹28,475 at 20% rate of interest per annum, compounded annually. The total amount (in ₹) received by Akshat after 2 years is:

1. A

   40793

2. B

   41108

3. C

   40950

4. D

   41004

Appeared in: DSSSB October 2024

Explanation

• The problem requires calculating the final amount using the compound interest formula: A = P(1 + R/100)ᵀ.
• Given values are Principal (P) = ₹28,475, Rate (R) = 20%, and Time (T) = 2 years.
• Substituting the values: A = 28475 * (1 + 20/100)².
• Simplifying the expression: A = 28475 * (1.2)² = 28475 * 1.44.
• The final calculation yields A = ₹41,004.

Why Other Options Were Wrong

• Option A: This value is incorrect and likely results from a miscalculation, possibly by using an incorrect multiplier or making an arithmetic error during the final multiplication.
• Option B: This value is slightly higher than the correct answer. This could be due to an error in squaring the (1 + R/100) term or an arithmetic mistake in the final multiplication step.
• Option C: This value is incorrect. It might be the result of rounding numbers prematurely during calculation or another form of arithmetic error.

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Clinical Relevance

• Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Calculation of amount using the compound interest formula as background academic context rather than a clinical decision trigger.
• While this is a mathematics question, understanding compound interest is crucial for personal financial planning, which is relevant for all professionals, including nurses.
• Nurses can use this knowledge for long-term savings goals, such as retirement planning, understanding loan repayments, and making informed investment decisions.
• What if? If the interest was simple interest instead of compound, the total interest would be P * R * T / 100 = 28475 * 20 * 2 / 100 = ₹11,390. The total amount would be 28475 + 11390 = ₹39,865.

How to Approach the Question

• First, identify the key information provided: Principal (P), Rate of Interest (R), and Time (T).
• Recognize that the interest is 'compounded annually', which points to the compound interest formula, not the simple interest formula.
• Recall the formula for compound interest: Amount = P * (1 + R/100)ᵀ.
• Substitute the given values (P=28475, R=20, T=2) into the formula.
• Carefully perform the arithmetic operations, starting with the expression in the parentheses, then the exponent, and finally the multiplication.
• Compare your final calculated amount with the given options to find the correct answer.

Concept Tested & Keywords

• Concept Tested: Calculation of amount using the compound interest formula.
• Stem keywords: deposited a sum, rate of interest, compounded annually, after 2 years
• Lead-in keywords: total amount

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QFsFUTk4SopWe2-ywr90Ek

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