Question

a man saves rs.20000 at the beginning of each year and puts the money in a bank that pays 10 percent interest per year, interest being compounded annually. what would be the total savings of the man at the end of 6 years​

Answer 1

Answer:

P= 20,000 t = 5 years , R = 5 %

So the present value

\left [ 20000+\frac{20000}{1.05}+\frac{20000}{1.05\times 1.05}+\frac{20000}{1.05\times 1.05\times 1.05} \right ]

Let this be  by Pv

Desired answer = future value ( at the end of 5 years )

Pv (1+5 % ) 5

Pv (1.05)5

Pv x 1.276

= 115920 Rs.

Explanation:

hope it helps(:

Answer 2

Answer:

The total amount saving at the end of the 6 years is Rs. 169840

Explanation:

compounded interest: With Compound Interest, you work out the interest for the first period, add it to the total, and then calculate the interest for the next period, and so on.

Amount = principal (1 + rate of interest/ 100)^time

The first Rs. 20000 would become 20000(1.1)^6 after 6 years,

the second will become 20000(1.1)^5.

the third will become 20000 (1.1)^4,

the fourth will become 20000 (1.1)^3,

the fifth will become 20000(1.1)^2,

and the sixth will become 20000 (1.1).

Total amount = 20000 [(1.1) + (1.1)2 + (1.1)3 + (1.1)4 + (1.1)5 + (1.1)6]

= (20000) (1.1) [ 1 + (1.1) + (1.1)2 + (1.1)3 + (1.1)4 + (1.1)5]

= 22000 ×(1.1)^6 – 1 / 1.1-1 = 22000 (7.72) = Rs. 169840

therefore the total amount saving at the end of the 6 years is Rs. 169840.

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