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Question
A person deposits ₹ 2,000 at the end of every month from his salary towards his contributory pension scheme. The same amount is credited by his employer also. If 8% rate of compound interest is paid, then find the maturity amount at end of 20 years of service. [(1.0067)240 = 4.9661]
Solution
A person deposit ₹ 2,000.
The employer also credited the same amount.
a = ₹ 2,000 + ₹ 2,000 = ₹ 4,000
A = `"a"/("i"/"k") [(1 + "i"/"k")^("nk") - 1]`
= `4000/((8//100)/12) [(1 + (8/100)/12)^240 - 1]`
A = `(4000 xx 12 xx 100)/8 [(1 + 0.067)^240 - 1]`
If (1.0067) = 4.966 ..............(Original value)
Then A = 600000 (4.966 – 1)
= 600000 (3.966)
= ₹ 23,79,600
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