Question

A person has deposited Rs. $25,000$ in an investment which yields $14\%$ simple interest annually. Do these amounts $(\text{principal}+\text{interest})$ form an $A.P.$? If so, determine the amount of investment after $20$ years.

Answer 1

Interests on investments based on simple interest are calculated only on the principle amount.

It does not matter how many years have passed, at any year interest will be calculated on the initial principle amount. So the interest for every year is same.

Hence, these amounts form an A.P.

The common difference, $d=$Interest for $1$ year $=$ $Rs.25000\times \frac{14}{100}=Rs.3500$

First term $a=$Amount after $1$ year $=$ $Rs.(25000+3500)=Rs.28500$

Amount after $20$ years $=a+(20-1)d$

$=Rs.(28500+19\times 3500)$

$=Rs.95000$

Hence, the amount of investment after $20$ years is $Rs.95000$