Question

A man deposited $Rs10000$ in a bank with interest rate of $5\%$ simple interest annually. Find the amount in $15th$ year since he deposited the amount and also calculate the total amount after $20$ years.

Answer 1

It is given that the man deposited Rs 10000 in a bank at the rate of 5% simple interest annually. Since, the simple interest is added every year, the amount in every year is a term in arithmetic progression.

Formula for Simple Interest $I=\frac{P\cdot T\cdot R}{100}$

$\therefore$ Interest for each year $=\frac{5}{100}\times Rs10000=Rs500$

Interest for each year is the common difference.

Formula for $n^{th}$ term in an AP $t_n=a+(n-1)d$

Amount in ${15}^{th}$ year $=10000+14\left(500\right)$

$=17000$

Amount after 20 years, which is amount in ${21}^{st}$ year$=10000+20\left(500\right)$

$=20000$