There are five levels {P, Q, R, S, T} in a linear supply chain before a product reaches customers, as shown in the figure.

At each of the five levels, the price of the product is increased by 25%. If the product is produced at level P at the cost of Rs. 120 per unit, what is the price paid (in rupees) by the customers?

The correct option is 366.21.

Based on the linear supply chain diagram provided in the image, the product passes through five levels sequentially before reaching the customers:
P → Q → R → S → T → Customers

At each of the five levels, the price of the product is increased by 25%. This means the price after each level is 125% (or 1.25 times) of the price at the preceding level.

Let the initial cost of production at level P be:
${\mathrm{Price}}_0=120$

Since the price is increased by 25% at each of the 5 levels (P, Q, R, S, and T), the final price paid by the customers can be calculated using the compounding formula:
${\mathrm{Price}}_{\mathrm{Final}}={\mathrm{Price}}_0\times {(1+\frac{25}{100})}^5$

We simplify this expression step-by-step:
${\mathrm{Price}}_{\mathrm{Final}}=120\times {\left(1.25\right)}^5$

Let us calculate the compounding multiplier:
${\left(1.25\right)}^5=3.0517578125$

Now, calculate the final price paid by the customers:
${\mathrm{Price}}_{\mathrm{Final}}=120\times 3.0517578125=366.2109375$

Rounding to two decimal places, the price paid by the customers is Rs. 366.21.