Question

Hiran invests 20 000 rupees in an account for 3 years at 1.5% per year compound interest.

Work out the total amount of money in the account at the end of 3 years.
Give your answer to the nearest rupee.

Answer 1

Answer:

There will be 20 914 rupees in the amount at the end of 3 years.

Step-by-step explanation:

The amount of rupes after t years in compound interest is given by:

$A(t) = A(0)(1+r)^{t}$

In which A(0) is the initial amount and r is the interest rate, as a decimal.

Hiran invests 20 000 rupees in an account for 3 years at 1.5% per year compound interest.

This means that $A(0) = 20000, r = 0.015$. So

$A(t) = A(0)(1+r)^{t}$

$A(t) = 20000(1+0.015)^{t}$

$A(t) = 20000(1.015)^{t}$

Work out the total amount of money in the account at the end of 3 years.

This is A(3). So

$A(3) = 20000(1.015)^{3} = 20913.6$

Rounding to the nearest rupee.

There will be 20 914 rupees in the amount at the end of 3 years.