Question

1 If you wish to accumulate Rs. 140,000 in 13 years, how much must you deposit today in an account that pays an annual interest rate of 14%?

Answer 1

Answer:

To accumulate $\text{Rs.}\;140,000$ in $13$ years at an interest rate of $14\%$ we must deposit $\text{Rs.}\;63,100.$

Explanation:

Given: $I=140,000$, Time $=13$ years and Rate of interest $=14\%.$

To Find: Amount to be deposited.

Solution: Suppose, the amount deposited is Rs $x.$

To calculate the deposited amount use the formula,

$\begin{aligned} I=\frac{PTR}{100} \end{aligned}$

Adding the given values in the above formula,

          $\begin{aligned} I=\frac{PTR}{100} \end{aligned}$

          $\begin{aligned} I= \frac {x \times 13 \times 14}{100} \end{aligned}$

$\begin{aligned} 140,000= \frac {x \times14}{7.69} \end{aligned}$

          $\begin{aligned} x=\frac {140,000 \times 7.69}{14} \end{aligned}$

          $\begin{aligned} x=\frac{1,076,600}{14} \end{aligned}$

          $x=\text{Rs.}\;76,900$

Amount to be deposited is $=\text{Rs.}\;140,000-\text{Rs.}\;76,900$

                                              $=\text{Rs.}\;63,100$

Hence, To accumulate $\text{Rs.}\;140,000$ in $13$ years at an interest rate of $14\%$ we must deposit $\text{Rs.}\;63,100.$