Question

An NGO wants to invest Rs.300000 in a bond which pays 5% annual interest first year, 6% interest second year, 7% interest third year and so on. The interest received per year is to be utilised for the education of poor people. If the investment done for 10 years,find the total interest received by N.G.O.​

Answer 1

Answer:

Calculate the simple interest for each year. Add the interests thus obtained to get the final answer.Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.

Step-by-step explanation:

We are given the information about an investment that an N.G.O. wants to make a bond.

Each year the rate of interest increases by 1%

.

We are asked to find the total interest received by the N.G.O. if the investment is done for 10 years.

We will use the formula for simple interest to compute the interest received by the N.G.O. in each year.

I=P×n×r100

Here, I am the principal, n is the period of interest in years, r is the rate of interest per annum.

Given that investment = 300000

Therefore, P = 300000.

Also, n = 1 for each year

For 1st year, r = 5%

Hence, the total interest received by the N.G.O. is 285000.