Solutions
The rate of interest which is charged


Hence, the net value after three years


Detailed Solution:
Interest of 1 year = 10% of Rs.2,00,000 = Rs.20,000
Tax on Interest = 20% of Rs.20,000 = Rs.4,000
So, Amount after tax deduction = 2,00,000 + 20,000 − 4,000
= Rs.2,16,000
Again Interest of 1 year = 10% of Rs.2,16,000 = Rs.21,600
Tax on Interest = 20% of Rs.21,600 = Rs.4,320
So, Amount after tax deduction = 2,16,000 + 21,600 − 4,320
= Rs.2,33,280
Again Interest of 1 year = 10% of Rs.2,33,280 = Rs.23,328
Tax on Interest = 20% of Rs.23,328 = Rs.4665.60
So, Amount after tax deduction = 2,33,280 + 23,328 − 4,665.60
= Rs.2,51,942.40
Thus, the amount will become Rs.2,51,942.40 after 3 years.