What sum of money must be deposited in the bank at the end of each year for 3 years to get rs 10000 at the end of 5 years if bank pays interest 8% per annum compound annually?
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Answer:
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Answer:
The amount of money that must be deposited in the bank at the end of each year for 3 years to get Rs 10,000 at the end of 5 years, with an interest rate of 8% per annum compounded annually, is approximately Rs 2,652.69.
Explanation:
Let X be the amount of money to be deposited in the bank at the end of each year for 3 years.
Using the formula for compound interest, the amount A after n years with a principal P and an interest rate r compounded annually is given by:
A = P(1 + r)^n
At the end of the 5th year, the amount accumulated with an initial deposit of X at the end of each year for 3 years is:
A = X(1 + 0.08)^3 + X(1 + 0.08)^2 + X(1 + 0.08)^1
A = X(1.08)^3 + X(1.08)^2 + X(1.08)
A = X(1.08)^3 + X(1.08)^2 + X(1.08)
A = X(1.08^3 + 1.08^2 + 1.08)
Since the accumulated amount is equal to Rs 10,000, we can set up the equation:
X(1.08^3 + 1.08^2 + 1.08) = 10,000
Solving for X:
X = 10,000 / (1.08^3 + 1.08^2 + 1.08)
X ≈ Rs 2,652.69
Therefore, the amount of money that must be deposited in the bank at the end of each year for 3 years to get Rs 10,000 at the end of 5 years, with an interest rate of 8% per annum compounded annually, is approximately Rs 2,652.69.
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