Question

Randhir wants to save for his son's college education, which will start in 6 years time. Assuming that he
starts saving Rs 20000 at the beginning of each year for this goal, how much will the education fund be in 6
years if the annual interest rate earned is 15%?
201335
210335
189535
198535​

Answer 1

Randhir wants to save for his son's college education, which will start in 6 years time. Assuming that he

starts saving Rs 20000 at the beginning of each year for this goal, how much will the education fund be in 6

years if the annual interest rate earned is 15%?

201335

210335

189535

198535

Answer 2

Therefore at the end of the 6th year Rs. 2,01,335 will be there in the savings account. ( Option-a )

Given:

The amount to be saved at the beginning of every year = Rs. 20,000/-

Number of years = 6

The annual rate of interest earned = 15%

To Find:

The total amount earned after 6 years.

Solution:

The given question can be solved very easily as shown below.

At the end of 1st year:

⇒ Total amount in the saving account = Rs.20,000 + 15% × 20,000

⇒ Total amount in the savings account = 20,000 ( 1 + 0.15 )

⇒ Total amount in the saving account = 20,000 × 1.15 = 23,000

⇒ Total amount in the beginning of 2nd year = 23,000 + 20,000 = 43,000

At the end of 2nd year:

⇒ Total amount in the saving account = Rs.43,000 + 15% × 43,000

⇒ Total amount in the saving account = 43,000 ( 1 + 0.15 )

⇒ Total amount in the saving account = 43,000 × 1.15 = 49,450

⇒ Total amount at the beginning of 3rd year = 49,450 + 20,000 = 69,450

At the end of 3rd year:

⇒ Total amount in the saving account = Rs.69,450 + 15% × 69,450

⇒ Total amount in the saving account = 69,450 ( 1 + 0.15 )

⇒ Total amount in the saving account = 69,450 × 1.15 = 79,867.5

⇒ Total amount at the beginning of 4th year = 79,867.5 + 20,000 = 99,867.5

At the end of the 4th year:

⇒ Total amount in the saving account = 99,867.5 + 15% × 99,867.5

⇒ Total amount in the saving account = 99,867.5 ( 1 + 0.15 )

⇒ Total amount in the saving account = 99,867.5 × 1.15 = 1,14,847.625

⇒ Total amount at the beginning of 5th year = 1,14,847.625 + 20,000 = 1,34,847.625

At the end of the 5th year:

⇒ Total amount in the saving account = 1,34,847.625 + 15% × 1,34,847.625

⇒ Total amount in the saving account = 1,34,847.625 ( 1 + 0.15 )

⇒ Total amount in the saving account = 1,34,847.625 × 1.15 = 1,55,074

⇒ Total amount at the beginning of 6th year = 1,55,074 + 20,000 = 1,75,074

At the end of the 6th year:

⇒ Total amount in the saving account = 1,75,074 + 15% × 1,75,074

⇒ Total amount in the saving account = 1,75,074 ( 1 + 0.15 )

⇒ Total amount in the saving account = 1,75,074 × 1.15 = 2,01,335

⇒ Total amount at the end of 6th year = Rs.2,01,335

Therefore at the end of the 6th year Rs. 2,01,335 will be there in the savings account.

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