Question

A man deposits Rs 1,000 in a savings bank account. How much will it amount in three years if the rate of interest is 5% per annum and the interest is payable annually ?
(Solve without using formula)

Answer 1

Interest on Rs 1000 for the first year = Rs $\frac{1000\times 1\times 5}{100}=Rs10\times 1\times 5=Rs.50$
Amount after one year = Rs 1000 + Rs 50 = Rs 1050
$\therefore$ Interest for the second year $=\frac{1050\times 1\times 5}{100}=Rs\frac{105}{2}=Rs52.50$
Amount after two years = Rs 1050 + Rs 52.50 = Rs 1102.50

$\therefore$ Interest 1 for the third year = Rs $\frac{1102.50\times 1\times 5}{100}=Rs\frac{5512.5}{100}=Rs.55.13$
Amount after three years = Rs 1102.50 + Rs 55.13 = Rs 1157.63
Thus, Rs 1,000 will become Rs 1.157.63 in three years.