Question

If Inflation increases at a rate of 8 p.c.p.a What will a Rs.20 article cost at the end of two
years ?
(a) between Rs,20 and Rs.21
(b) between Rs.21 and Rs.22
(c) between Rs.22 and Rs.23
(d) between Rs.23 and Rs.24

Answer 1

the cost will be between Rs.22 and Rs. 23

Answer 2

Answer:

option (d)

Step-by-step explanation:

current price of an article = 20 rs.

rate of change of inflation = 8% p.a.

so at the end of two years price of that article will be

$20*\frac{108}{100}*\frac{108}{100}\\\\=23.328$

as rate of article after two years is 23.328 rs. which is between Rs.23 and Rs.24

so option (d) is correct.