Question

A man saves Rs. 3,000 every year and invests it at the end of the year at 10% compound interest. Calculate the total amount of his savings at the end of the third years.

Answer 1

Savings at the end of every year = Rs. 3000

For 2^nd year

P = Rs. 3000

R = 10%

T = 1 year

I = `[ 3000 xx 10 xx 1]/[100]` = 300

A = 3000 + 300 = Rs. 3300

For third year, savings = 3000

P = 3000 + 3300 = Rs. 6300

R = 10%

T = 1 year

I = `[ 6300 xx 10 xx 1]/100` = Rs. 630

A = 6300 + 630 = Rs. 6930

Amount at the end of 3^rd year

= 6930 + 3000

= Rs. 9930