If inflation increases at a rate of 8 % p.a., | vedclass

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(D) The cost of an article increases due to inflation,which follows the compound interest formula: $A = P(1 + \frac{R}{100})^n$.Here,the initial cost

Vedclass · Accepted Answer

Between $₹ 23$ and $₹ 24$

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(D) The cost of an article increases due to inflation,which follows the compound interest formula: $A = P(1 + \frac{R}{100})^n$.Here,the initial cost $P = ₹ 20$,the rate of inflation $R = 8 \%$,and the time period $n = 2$ years.Substituting these values into the formula:$A = 20 	imes (1 + \frac{8}{100})^2$$A = 20 	imes (1 + 0.08)^2$$A = 20 	imes (1.08)^2$$A = 20 	imes 1.1664$$A = 23.328$Thus,the cost of the article after two years will be $₹ 23.328$,which lies between $₹ 23$ and $₹ 24$.

If inflation increases at a rate of $8 \%$ p.a.,what will a $₹ 20$ article cost at the end of two years?

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