Question

A company offers the following growing rates of compound interest annually to the investors onsuccessive years of investment, 4%, 5% and 6%. A man invests Rs.25,000 for 3 years. What will be his gain?

Answer 1

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Answer 2

1st year

Principal, P=Rs.5000

Time, T=1 year

Rate of interest ,R=6%

∴simple Interest, SI=100PTR=1005000×10×6=Rs.300

∴Amount=P+SI=Rs.5300

2nd year

Principal = Amount of 1st year=Rs.5300

Rate of interest =8%

Time =1 year

∴ Interest =1005300×1×8=Rs.424

∴ Amount =Rs.(5300+424)=Rs.5724

The interest of 2nd year is the required compound interest. So, C.I=rs.424 and the required amount is Rs.5724