Question

How much will Rs. 50,000 amount to in 3 years, compounded yearly, if the rates for the successive years are 6%, 8% and 10% respectively?

Answer 1

Interest for the first year = `["P" xx "R" xx "T"]/100`                         

                                        = `[ 50,000 xx 6 xx 1 ]/100`
                                        = Rs. 3,000
Amount for the first year = Rs. 50,000 + Rs. 3,000 = Rs. 53,000

Interest for the second year = `["P" xx "R" xx "T"]/100`

                                             = `[ 53,000 xx 8 xx 1]/100`
                                             = Rs. 4,240

Amount for the second year = Rs. 53,000 + Rs. 4,240 = Rs. 57,240

Interest for the third year = `["P" xx "R" xx "T"]/100`   

                                          = `[57,240 xx 10 xx 1]/100`

                                          = Rs. 5,724

Amount for the third year = Rs. 57,240 + Rs. 5,724 = Rs. 62,964
Hence, the amount will be Rs. 62,964.