Question

Shikha deposited Rs 2000 in a bank which pays 6% simple interest. She withdrew Rs 700 at the end of first year. What will be her balance after 3 years?

Answer 1

Principal amount deposited (P) = Rs 2000
Time period (T) = 1 year
Rate of interest (R) = 6% p.a.
Interest after 1 year = $\frac{P\times R\times T}{100}=\frac{2000\times 6\times 1}{100}=\mathrm{Rs}120$
So amount after 1 year = Principal amount + Interest = 2000 + 120 = Rs 2120
After 1 year, amount withdrawn = Rs 700
Principal amount left (P₁) = Rs 2120 − Rs 700 = Rs 1420
Time period (T) = 2 years
Rate of interest (R) = 6% p.a.
Interest after 2 years = $\frac{P_1\times R\times T}{100}=\frac{1420\times 6\times 2}{100}=\mathrm{Rs}170.40$

Total amount after 3 years = Rs 1420 + Rs 170.40 = Rs 1590.40