Three amounts x, y, z are such that y is the compound interest on x; and z is the compound interest on y. The rate of interest per annum and the time period in years are same. Which one of the following is correct?
- A. x^2=yz
- B. y^2=zx ✓
- C. z^2=xy
- D. x=yz
Correct Answer: B. y^2=zx
Explanation
Let the multiplier for the compound interest be K = (1 + \frac{R}{100})^T - 1. We are given y = Kx and z = Ky. Dividing the equations gives \frac{y}{x} = \frac{z}{y} \implies y^2 = zx.
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