A) \[100\left\{ {{\left( 1+\frac{k}{100n} \right)}^{n}}-1 \right\}\]
B) \[{{\left( 1+\frac{k}{n} \right)}^{n}}-1\]
C) \[\frac{100}{n}\left\{ {{\left( 1+\frac{k}{n} \right)}^{n}}-1 \right\}\]
D) \[\frac{100}{n}\left[ {{\left( 1+\frac{n}{100k} \right)}^{k}}-1 \right]\]
Correct Answer: A
Solution :
[a] Let the value of the fixed deposit certificate be Rs. 100. Since the rate k is calculated n times in a year so the rate percent per unit of time is \[\frac{k}{n}\]. Thus effective rate of compound interest is [a].
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