If inflation increases at a rate of 8% p.a., what will a Rs. 20 article cost at the end of two years ? Options: A . &nbspbetween Rs. 20 and Rs. 21 B . &nbspbetween Rs. 21 and Rs. 22 C . &nbspbetween Rs. 22 and Rs. 23 D . &nbspbetween Rs. 23 and Rs. 24

If inflation inc

Question

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

Options:

A . between Rs. 20 and Rs. 21

B . between Rs. 21 and Rs. 22

C . between Rs. 22 and Rs. 23

D . between Rs. 23 and Rs. 24

Answer: Option D

Cost after 2 years = Rs.`[20 xx (1 + 8/100)^2]` = Rs.`(20 xx 27/25 xx 27/25)` = Rs. 23.33

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