Directions: Based on the following passage, answer the questions which follow A took a voluntary retirement on February 1st, 2014 and received 10 lakhs as retirement benefits. As on that day he also…

Question

Directions: Based on the following passage, answer the questions which follow A took a voluntary retirement on February 1st, 2014 and received 10 lakhs as retirement benefits. As on that day he also had Rs 3 lakhs in the bank. Of the total amount he had, 60% was invested in the bank which gives an annual compounded interest of 15%, for three years. Of the remaining part, half was invested in shares, which appreciated by 15% in the first year, 6% in the second year and depreciated by 10% the next year. The remaining part was invested in real estate. The real estate values increased by 10% in the first year, reduced by 10% in the next year and remained steady in the third year. What was the approximate value (kin rupees lakhs) of his investment on 1st February 2017?

PYQPulse · Accepted Answer

C. 17.286 lakhs

PYQPulse · Answer

Explanation: Money in bank = 7.8*(1+0.5)3 = 7.8*1.52= 11.86 (use compound interest formula for three years) For the first year, share value increases by 15%, for the second year it increases by 6% and for the third year it decreases by 10%. So, value of share at the end of three years is 2.6*1.1*1.06*0.9 = 2.852 Similarly, Value of real estate = 2.6*1.1*0.9 = 2.574 Total value = 17.286

Answer: C. C. 17.286 lakhs

Explanation

Answer: C. C. 17.286 lakhs

Explanation