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Gopal invest Rs. 10,000 in bajaj Finserv Ltd. for 3 years at 5% p.a. compound interest reckoned yearly.If the provident fund at the rate of 20% on the interest earned is deducted at the end of each year. Find the amount at the end of third year.
1. Rs. 12148.64
2. Rs. 11284.46
3. Rs. 11248.64
4. Rs. 12481.46

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Correct Answer - Option 3 : Rs. 11248.64

Given

Invested money = Rs.10,000

Time = 3 years

Rate = 5% p.a. compounded yearly

P.F is deducted at the rate of 20% each year.

Formula Used

C.I. = P [ (1 + R/100)n - 1]

Calculation

For 2nd year, P = 10,400, R = 5%, n = 1

C.I. = 10,000 [(1 + 5/100) - 1] = 10000 × 1/20 = Rs. 500

Amount at the end of 2nd year = 10400 × 520 - 20% of 520

⇒ 10920 - 104

⇒ Rs. 10,816

for 3rd year, P = 10,816, R = 5%, n = 1

C.I. = 10,816 [(1 + 5/100) - 1]

⇒ 10816 × 1/20

⇒ Rs. 540.80

Amount at the end of 3rd year = 10816 + 540.80 - 20% of 540.80

⇒ 11356.80 - 108.16

⇒ Rs.11,248.64

Thus, the amount at the 3rd year is Rs.11,248.64.

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