## sachin invests 200000 for 2 years at 12% per annum compounded annually. if the interest accrured is subject to income tax at 25% a

Question

sachin invests 200000 for 2 years at 12% per annum compounded annually. if the interest accrured is subject to income tax at 25% at the end of each year,find the amount he recieved at the end of 2 years.​

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11 months 2021-07-03T10:56:36+00:00 1 Answers 0 views 0

Given Principle amount  =  Rs . 200000

And

Rate of interest  = r =  12%  compounded annually

So,

Interest after 1 year  = 200000 × 12 × 1100 = 2000×12 = Rs . 24000

And

The interest accrued is subject to income tax at 25% at the end of each year .

So, Income tax on 24000 = 25% of 24000 = 24000 × 25100 =  Rs. 6000

So,

Principle amount after 1 year and after income tax  =  200000 + 24000 – 6000 =  218000

So,

Total interest after second year  = 218000   × 12 × 1100 = 2180×12 = Rs.26160

So, Income tax on 26160 = 25% of 26160 = 26160 × 25100 =  Rs. 6540

So,

Amount after 2year and after income tax  = 218000  + 26160 – 6540 =  Rs .237620                                  ( Ans )