Question

A man saves Rs. $3,000$ every year and invests it at the end of the year at $10\%$ compound interest. Calculate the total amount of his savings at the end of the third year. (Enter your answer in Rs.)

Answer 1

For the first year i.e, at the end of the second year, the interest being compounded at $R=10$ %, we have
$Amount=P{(1+\frac{R}{100})}^N=3,000\times {(1+\frac{10}{100})}^1=3,000\times 1.1=Rs3,300$
For the second year i.e, at the end of the third year, $P=Rs3,300+Rs3000=Rs6,300$ the interest being compounded at $R=10$ %, we have

$Amount=P{(1+\frac{R}{100})}^N=6,300\times {(1+\frac{10}{100})}^1=6,300\times 1.1=Rs6,930$

At the end of third year, $P=Rs6,930+Rs3000=Rs9,930$