Question

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?

Answer 1

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The amount withdrawn for the four periods is :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Total withdrawn is :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