Question

A man invests Rs. 6500 for 3 years at 4.5% p.a. compound interest,
compounded annually. 20% is deducted at the end of each year from
this investment for expenditures. Find the amount due at the end of the
third year.
a.
Rs. 3688.24
b.
Rs. 4946.62
C.
Rs. 3797.80
d.
Rs. 5244.04​

Answer 1

Answer:

option (a) is the right answer

Step-by-step explanation:

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Answer 2

The amount due at the end of the third year is c)Rs. 3797.80.

Step-by-step procedure

Given:

Principle amount= Rs. 6500

Interest p.a.= 4.5%

Amount deducted at the end of each year= 20%

Solution:

The formula to calculate the amount at the end of each year:

a= P( 1+ R÷100) t

Putting the values,

a= 6500( 1+ 4.5÷100) 1

a= 6500 ×1.045 ×1

a= Rs. 6792.50

Now, it is given that a 2%  of amount deduction takes place at the end of each year.

so the amount deducted at the end of one year= 6792.5 ×8÷100

Amount deducted= Rs. 5434

This will be the principle for next year.

The amount at the end of year 2:

$a_{2}$= 5434 × 1.045 × 0.8

$a_{2}$= Rs. 4542.82

Therefore, the amount at the end of year 3:

$a_{3}$= 4542.82 × 1.045 × 0.8

$a_{3}$=  Rs. 3797.8

Result:

Thus, the amount due at the end of the third year is c)Rs. 3797.80.

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