Mathematics
A man saves ₹ 3000 every year and invests it at the end of the year at 10% compound interest. Calculate the total amount of his savings at the end of the third year.
Compound Interest
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Answer
Savings at the end of every year = ₹ 3000
For 2nd year :
P = ₹ 3000
R = 10%
T = 1 year
⇒ I = = ₹ 300
A = ₹ 3000 + ₹ 300 = ₹ 3300
Savings at end of second year = ₹ 3000
For third year :
P = 3000 + 3300 = ₹ 6300
R = 10%
T = 1 year
⇒ I = = ₹ 630
A = ₹ 6300 + ₹ 630 = ₹ 6930
Savings at end of second year = ₹ 3000
Amount at the end of 3rd year
A = ₹ 6930 + ₹ 3000 = ₹ 9930.
Hence, amount at the end of third year = ₹ 9930.
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