Question

Rahim, Johny and Gopu deposited 10,000 rupees each, under different schemes, in a bank which gives 8% interest. Rahim gets simple interest, Johny gets interest compounded half-yearly and Gopu gets interest compounded quarterly. Compute the total amount each of them gets back after one year and compare these amounts.

Answer 1

Amount deposited by Rahim, Johny and Gopu, P = Rs.10000

Rate of interest, R = 8%

Time, T = 1 year

For Rahim:

Simple interest =

Amount that Rahim gets = Principal + Simple interest

= Rs.10000 + Rs.800

= Rs.10800

For Johny:

Interest for the first half-year = Rs

= Rs.400

Principal for the second half-year = Principal + Interest

= Rs.10000 + Rs.400

= Rs.10400

Interest for the second half-year = Rs

_{= Rs.416}

Amount Johny gets = Rs.10400 + Rs.416

= Rs.10816

For Gopu:

Interest for the first quarter = Rs

= Rs.200

Principal for the second quarter = Principal + Interest

= Rs.10000 + Rs.200

= Rs.10200

Interest for the second quarter = Rs

= Rs.204

Principal for the third quarter = Rs.10200 + Rs.204

= Rs.10404

Interest for the third quarter = Rs

= Rs 208.08

Principal for the fourth quarter = Rs.10404 + Rs.208.08

= Rs.10612.08

Interest for the fourth quarter = Rs

= Rs.212.24

Amount that Gopu gets = Rs.10612.08 + Rs.212.24

= Rs.10824.32

It can be observed that:

Amount received by Gopu > Amount received by Johny > Amount received by Rahim