Question

A bank offers 10% interest rate compounded annually. a person deposits rs. 20,000 every year in s account. if he does not withdraw any amount, then how much balance will s account show after four years?

Answer 1

The formula for Compound Interest is given by,
C.I. = P{(1+r/100)^t}

Now, the balance shown will be its Amount = C.I. + Principle
So, C.I. = ₹20,000{(1+o.1)^4}
= ₹20,000{(1.1)^4}
= ₹20,000(1.4641)
= ₹29,282

Hence, Amount = ₹(29,282+20,000) = ₹49,282