What does Rs. 250 amounts to in 2 years with compound interest at the rate of 4% in the 1^st year and 8% in the second year ?

A. Rs. 280

B. Rs. 280.80

C. Rs. 468

D. Rs. 290.80

Answer: Option B

Solution(By Examveda Team)

$$\eqalign{ & {\text{Principal = Rs 250}} \cr & {{\text{R}}_1} = 4\% ,\,\,\,\,\,\,\,\,\,{{\text{R}}_2} = 8\% \cr & {\text{Amount}}\,{\text{after}}{1^{st}}\,{\text{year}} \cr & = 250\left( {1 + \frac{4}{{100}}} \right) = {\text{Rs}}{\text{. }}260 \cr & {\text{Amount after }}{{\text{2}}^{{\text{nd}}}}{\text{ year}} \cr & {\text{ = }}260\left( {1 + \frac{8}{{100}}} \right) \cr & = {\text{Rs}}{\text{. }}280.80 \cr} $$