A senior citizen invest Tk. 50 lac in a fixed deposit scheme at 11.5 % annual interest for six months. In every six months he withdraws Tk. 2 Lac from his principal plus interest earned. What will be his principal amount to invest after two years?
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Accumulation factor:
P(1 + i) ⁿ
P = principle amount
i = Interest rate
n = Time in years
Substituting in the formula to get the accumulated amount in 2 years
50 × (1. 115) ² = 62.16125
The interest earned is :
62.16125 - 50 = 12.16125
There are 4 six months periods in 2 years
Every period he withdraws 2 lac.
The amount withdrawn for the four periods is :
2 × 4 = 8lac
Total withdrawn is :
12.16125 + 8 = 20.16125
The amount remaining to be invested is :
62.16125 - 20.16125 = 42 lac
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