Question

Mr Sehwag invests Rs 2000 every year with a company, which pays interest at 10% p.a. He allows his deposit to accumulate at C.I. Find the amount to the credit of the person
at the end of 5th year

Answer 1

An amount of Rs 2,000 is invested every year at 10% per annum at Compound interest.

P = Rs 2,000.  r = 10% = 0.1    n = 5 years

Accumulated amount S = P[(1+r)^n + (1+n)^n-1 + (1+n)^n-2 + ... + (1+r)^2+(1+r) ]
       S = P (1+r) [ (1+r)^n - 1 ] / [ (1+r) - 1 ]
     S = P (1+r) [ (1+r)^n - 1 ] / r

  S = 2000(1.1) [ 1.1^5 - 1 ] /0.1 =Rs 13, 431.22
     Of this Rs 10,000 was paid in 5 installments by sehwag, and remaining is the interest.