Given:

Mr. X invests Rs 5500 for 3 years at 8% p.a

compound interest reckoned yearly.

 Income tax at the rate of 15% on the interest earned

is deducted at the end of each year.

Formula Used:

CI = P [1+(R/100)]n - P

Calculation:

ATQ,

The interest earned at the end

of first year will be -

CI = 5500(1.08)¹ – 5500

CI = Rs.440

Income tax @15% is deducted on the Interest earned =440 × (3/20) = 66

Amount at the end of first year = 5500 + 440 – 66 = 5874

Now the amount at the end of first year is taken as principal at the beginning of second year

Interest earned at the end of second year CI = 5874(1.08) – 5874 = 469.92

Income tax deducted = 469.92 × ((3/20) = 70.488

Amount at the end of second year =  5874 + 469.92 - 70.488 = 6273.432

Interest earned at the end of third year CI = 6273.432(1.08) – 6273.432 = 501.874

Income tax deducted = 501.874 × (3/20) 

⇒ 75.28

Amount at the end of third year = 6273.432 + 501.874 – 75.28

⇒ 6700.0026 ≈ 6700

∴ The amount at the end of third year is Rs. 6700