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Question 185 of 200
The value of a land increases at the rate of 20% per annum. If its
present value is Rs. 10,00,000, what will be the value of land after 3
years?
Choose the correct answer
A a) Rs. 13,31,000
B b) Rs. 33,75,000
Cc) Rs. 27,44,000
D d) Rs. 17,28,000

Verified Answer :

GinnyAnswer

Let's determine the future value of the land given that it increases at the rate of 20% per annum. The present value of the land is Rs. 10,00,000, and we need to find the value after 3 years.

We will use the compound interest formula for this calculation. The formula for compound interest is:

\(\[ \text{Future Value} = \text{Present Value} \times (1 + r)^n \]\)

where:
- \(\(\text{Future Value}\)\) is the value we need to find,
- \(\(\text{Present Value} = 10,00,000 \text{ Rs}\)\),
- \(\(r\)\) is the rate of increase per annum (20% or 0.20),
- \(\(n\)\) is the number of years (3 years).

Let's plug in the values:

\(\[ \text{Future Value} = 10,00,000 \times (1 + 0.20)^3 \]\)

First, calculate \(\( (1 + 0.20) \)\):

\(\[ 1 + 0.20 = 1.20 \]\)

Next, raise this to the power of 3:

\(\[ 1.20^3 = 1.20 \times 1.20 \times 1.20 = 1.728 \]\)

Finally, multiply by the present value of the land:

\(\[ \text{Future Value} = 10,00,000 \times 1.728 = 17,28,000 \text{ Rs} \]\)

Therefore, the value of the land after 3 years will be Rs. 17,28,000.

The correct answer is:

\(\[ \text{D} \, \text{(Rs. 17,28,000)} \]\)

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