Question

A man was appointed to a salary of Rs. 10,000 with an increase each year by 10% of the salary of the previous year. How much does he receive during the fifth year?

a. Rs. 11,000
b. Rs. 12,100
c. Rs. 13,310
d. Rs. 14,641

Answer 1

Calculating the man's fifth year salary involves applying the compound interest formula with a 10% annual increase on the initial Rs. 10,000 salary, resulting in a fifth-year salary of Rs. 14,641.

Step-by-step explanation:

The question relates to calculating the salary of a man with a specific annual increase. To find out how much the man receives during the fifth year, we will have to calculate the compound interest on his salary, as it increases by a certain percentage each year. In this example, the salary starts at Rs. 10,000 and increases by 10% each year. The calculation follows the compound interest formula:

Final Amount = Principal Amount * (1 + (Rate of Increase))^Number of Years

Plugging in the values, we get:

Final Amount = 10,000 * (1 + 0.10)^4 = 10,000 * (1.10)^4 = 10,000 * 1.4641 = Rs. 14,641

Therefore, during the fifth year, the man receives Rs. 14,641. The correct answer is option (d).