CAT 1995 | Question: 76

Question

Choose the correct option:

The rate of inflation was $1000$%. What will be the cost of an article, which costs $6$ units of currency now, two years from now?

• A. $666$
• B. $660$ 
• C. $720$ 
• D. $726$

Answer 1

Let x be initial cost .

1000 % increase => x + (1000/100)x = 11x.

here, x=6. At the end of first year, cost=6*11=66.
Now this becomes the starting price for the next year. Hence at the end of 2nd yr, 66*11=726.

Option D is the Correct Answer.