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A man deposits Rs 200 at the end of each year in a recurring account at 5% compound interest. How much will it become at the end of 3 years?

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Question

A man deposits Rs 200 at the end of each year in a recurring account at 5% compound interest. How much will it become at the end of 3 years?

Sum
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Solution

At end of 1st year, 2nd year, and 3rd year ₹ 200 were deposited.

Rate of interest R = 5% p.a.

At end of 3 years, amount

= `200 + 200[1 + 5/100] + 200[1 + 5/100]^2`

= `200[1 + 1.05 + (1.05)^2]`

= 200[2.05 + 1.1025]

= 200 [3.1525] = 630.5

At end of 3 years, the account will have a balance of  ₹ 630.5.

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Simple and Compound Interest (Entrance Exam)
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Chapter 9: Commercial Mathematics - Exercise 9.3 [Page 130]

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