A bank offers an interest of 5% per annum compounded annually on all its deposits. If $10,000 is deposited, what will be the ratio of the interest earned in the 4th year to the interest earned in the 5th year? Choose the correct choice from the following answers:
A) 1:5
B) 625:3125
C) 100:105
D) 100^4:105^4
E) 725:3225
The interest earned in the 1st year = $500   The interest earned in the 2nd year = $500*1.05   The interest earned in the 3rd year = $500*1.05^2   The interest earned in the 4th year = $500*1.05^3   The interest earned in the 5th year = $500*1.05^4   (500*1.05^3)/(500*1.05^4) = 1/1.05=100/105.   Answer: 100:105.
<result>C</result>
A bank offers an interest of 5% per annum compounded annually on all its deposits. If $10,000 is deposited, what will be the ratio of the interest earned in the 4th year to the interest earned in the 5th year?