Question

Mrs. S deposited Rs. $1,00,000$ in a nationalized bank for $3$ years. If the rate of interest is $7\%$ p.a., Interest is compounded annually. Calculate the amount at the end of third year (i.e., Principal $+$ compound interest)

• A. $1,22,504.03$
• B. $1,02,504.30$
• C. $1,22,505.30$
• D. $1,22,405.30$

Answer 1

The correct option is A $1,22,504.03$

Interest for the$1^{st}$ year $=Rs\frac{100000\times 1\times 7}{100}=Rs7000$

Amount after the$1^{st}$ year $=Rs100000+Rs7000=Rs107000$

Interest for the $2^{nd}$ year $=Rs\frac{107000\times 1\times 7}{100}=Rs7490$

Amount after the $2^{nd}$ year $=Rs107000+Rs7490=Rs114490$

Interest for the$3^{rd}$ year $=Rs\frac{114490\times 1\times 7}{100}=Rs8014.3$

$\therefore$ Amount at the end of the $3^{rd}$ year $=Rs114490+Rs8014.3=Rs122504.30$