What principal grows to Rs. 4913 in 3 years at 6 1/4% annual compound interest_________??
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Answer: D. Rs. 4096
Explanation
An annual compound interest rate of six and one-fourth percent simplifies to a fractional multiplier of one-sixteenth. Over three consecutive years, the investment principal grows by the compounding growth factor ratio of seventeen over sixteen cubed. Multiplying the target amount of four thousand nine hundred thirteen by the inverted growth factor reveals a principal of four thousand ninety-six. Compound interest calculates earnings on both the initial principal and the accumulated interest from preceding periods. Fractional growth factors simplify manual calculations of multi-year compound interest problems without heavy logarithms. The principal represents the initial sum of money invested or borrowed before interest accumulates over time.
Option A yields an incorrect compound total when tested against the three-year duration and interest rate. Option B produces a mismatched final amount that fails to equal four thousand nine hundred thirteen. Option C is numerically close but fails to match the exact integer cube relationship required by the fractions.
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- Mathematics
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- Mathematics
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- —
- Difficulty
- medium
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