Question

A bank has a fixed the rate of interest 8% p.a semi aaunually compound interest in account X and 12% p.a annually compound interest in account Y. if you are going to deposit Rs. 120000 for 2 year in the same bank, in which account will you deposit and why ? give your reason with calculations.​

Answer 1

The amount of 120000 should be deposit in X account in the bank as it is giving more amount of compound interest.

As given in the question we have two accounts that is X and Y.

In X account the rate of interest is 8% per annum semi annually compound interest which means 16% per annum for year.

In Y accounts the rate of interest is 12% per annum compound interest for year.

hence, if we deposit the Rs. 120000 in bank with account X then

120000×16%= 19200 [ first year interest]

139200×16%=22272[second-year interest]

the total amount of compound interest  = Rs 41472.

now if we deposit in Y account then

120000×12%=14400

134400×12%=16128

the total amount of compound interest =Rs 30528

now we can see that we are getting more interest amounts in X account compared to Y.

hence, depositing the Rs.120000 in account X will be beneficial.

To know more about the compound interest click here: brainly.com/question/14295570

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