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Marlo Dev Panchal
Asked: 2022-11-11T22:23:51+05:30 In:

Ram saves Rs.60,000 at the beginning of each year and puts the money in a bank, That pays 10% annual compound interest, What would be the total saving of Ram at the end of 4 years?


1. Rs.3,06,400
2. Rs.2,96,306
3. Rs.2,40,000
4. Rs.3,06,306
5. None of these

Ram saves Rs.60,000 at the beginning of each year and puts the money in a bank, That pays 10% annual compound interest, What would be the total saving of Ram at the end of 4 years?


1. Rs.3,06,400
2. Rs.2,96,306
3. Rs.2,40,000
4. Rs.3,06,306
5. None of these
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  1. Correct Answer – Option 4 : Rs.3,06,306

    Given:

    Ram saves Rs.60,000 at the beginning of each year and puts the money in a bank.

    Rate of compound interest = 10% annually

    Time = 4 year

    Concept:

    Compound interest is interest on interest.

    A = P × (1 + R/100)T

    A = Final amount

    P = Initial amount

    R = Rate of interest

    T = Time

    Calculation:

    First year deposit in bank Rs.60,000

    After 1 year Amount = 60000 × (1 + 10/100)1

    After 2 year Amount = 60000 × (1 + 10/100)2

    After 3 year Amount = 60000 × (1 + 10/100)3

    After 4 year Amount = 60000 × (1 + 10/100)4

    Total amount after 4 year = 60000 × 1.1 × {1 + 1.1 + (1.1)2 + (1.1)3}

    ⇒ 66000 × (1 + 1.1 + 1.21 + 1.331)

    ⇒ 66000 × 4.641

    ⇒ Rs.3,06,306

    ∴ Total saving of Ram at the end of 4 years is Rs.3,06,306.

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