Question

The present value of a plot is ₹ 960000. Its value increases 6% every year. Find its value after 2 years.

Answer 1

Given:

• Present value of the plot, (V₀ = ₹ 960000)
• Rate of increase per year, (r = 6%)
• Time period, (n = 2) years

Step-wise calculation:

The plot value increases by 6% every year, meaning the value after each year will be multiplied by `(1 + 6/100) = 1.06`.

After 2 years, the value (V) will be:

V = V₀ × (1.06)²

V = 960000 × 1.06 × 1.06

V = 960000 × 1.1236

V = ₹ 1078656

The value of the plot after 2 years will be ₹ 10,78,656.