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Question

Harvinder deposited Rs.40,000 in a post officer for a period of three years. The post officer credits the interest yearly in his account at 7% per annum compounded annually. Find the balance in his account after three years.

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Solution

Given that,
Principle amount =Rs.40,000, Rate of compound interest =7%, Time t=3 years

Total amount after three years =p+p(1+r100)t
=40,000+40,000(1+7100)3
=40,000+40,000(1+0.7)3
=40,000+40,000×1.225
=Rs.89001.72

Hence, this is the required solution.

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