YES 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 one: A) 1:5 B) 625:3125 C) 100:105 D) 100^4:105^4 E) 725:3225
Hi Bunuel,   Here is my approach: is this correct?   YES bank offers an interest of 5% per annum compounded annually on all its deposits.   Interest earned in 4 year= 10000(1+0.05)^4   Interest earned in 5 year= 10000(1+0.05)^5   Ratio= {10000(1.05)^4}/{10000(1.05^5)} =&gt;1.05^4/1.05^5 =&gt;1/1.05 Multiplied by 100 in both numerator and denominator gives 100:105   Hence Ans:100:105
<result>C</result>
YES 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?