Question

A man saves Rs.20,000 at the beginning of each year and puts the money in a bank that pays 10% interest per year, interest being compounded annually. What would be the total savings of the man at the end of 6 years?

Answer 1

Step-by-step explanation:

For the first year, on interest being compounded at R=10 %, we have

Amount=P(1+ R/100 )N

=3,000×(1+ 10/100 ) 1

=3,000×1.1=Rs3,300

For the second year, P=Rs 3,300+Rs 3000=Rs 6,300 on interest being compounded at R=10 %, we have

Amount=P(1+ R/100 )N =6,300×(1+ 10/100 ) 1

=6,300×1.1=Rs6,930

At the end of third year, P=Rs 6,930+Rs 3000=Rs 9,930