Question

The price of a machine increases every year by 5%. If the current price of the machine is Rs 34000, what will be the price after two years?​

Answer 1

Answer:

The price will be Rs. 37485.

Step-by-step explanation:

We will use Compound Interest in this scenario.

Rate = 5%

Principal = Rs. 34000

Time = 2

Amount = P( 1 + (R/100))^T

             = 34000 ( 1 + ( 5/100 ))^2

             = 34000 ( 1 + ( 1/20 ))^2

             = 34000 ( 20/20 + ( 1/20 ))^2

             = 34000 ( ( 20 + 1 )/20 )^2      

             = 34000 ( 21/20 )^2

             = 34000 * (441/400)

             = ( 34000 * 441 )/400

             = ( 340 * 441 )/4

             = ( 85 * 441 )

             = Rs. 37485