Ankur invested a sum of for four years in a financial scheme. The rate of interest in the scheme is per annum compounded yearly for the first two years and per annum for the 3rd and 4th years compounded yearly. What will be the cumulative compound interest at the end of 4 years?
- A
- B
- C
- D
Solution & Step-by-step Explanation
Let the initial principal amount be .
The overall compound amount () at the close of 4 years with variable annual interest rates is formulated as:
Given: for the first two years, and for the final two years.
The total compound interest accrued () is derived by subtracting the original principal from the total final amount:
The overall compound amount () at the close of 4 years with variable annual interest rates is formulated as:
Given: for the first two years, and for the final two years.
The total compound interest accrued () is derived by subtracting the original principal from the total final amount: