Question

A person invests 500 at the end of each year with a bank which pays interest at 10% p. a C.I. annually. The amount standing to his credit one year after he has made his yearly
investment for the 12th time is.
​

Answer 1

please see the attachment

Answer 2

The amount standing to his credit one year after he has made his yearly

investment for the 12th time is Rs.11761.36.

Step-by-step explanation:

Given:

Sum = Rs. 500; r% = 10%; n = 12yeasrs

To be found:

The amount of his credit is one year.

Solution:

Future Value of Annuity is : F.V =  Sum x ( ( ( 1 + (R% ) ^ n - 1) / r%)

r% is 10%

Sum is 500

n is 12 years

Therefore on substituting:

F.V of Annuity = 500×${($$1.1^{12}-1$$)/0.1$

F.V of Annuity = Rs. $10692.14$

The interest of the 12th investment will also be added finally to this annuity value.

i.e. 12th investment interest is, $I_{12}=500$(1+10%)

$I_{12}=$500(1.1) $=11761.36$

Therefore amount of his credit would be Rs. 11761.36.