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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?
Solution
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.
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