Question

If a sum of money amounts to Rs.44000 at 5% p.a. after two years, how much will it amount to in 3 years at the same rate?

Answer 1

Given Amount A = 44000, R = 5%, T = 2 years.

We know that A = P(1 + r/100)^n

                        44000 = P(1 + 5/100)^2

                        44000 = P(1 + 1/20)^2

                        44000 = P(21/20)^2

                        44000 = P * 21/20 * 21/20

                        44000 = P * 441/400

                        44000 * 400 = P * 441

                         P = 44000 * 400/441

                             = 17600000/441

                             = 39909.297.


Then the amount after 3 years at the same rate will be:

A = 39909.297(1 + 5/100)^3

    = 39909.297(1 + 1/20)^3

    = 39909.297(21/20)^3

    = 39909.297 * 21/20 * 21/20 * 21/20

    = 46199.9999

    = 46200.


Hope this helps!