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

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

1. Answer :237620

   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 )

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