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

1.	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.3,06,4002. Rs.2,96,3063. Rs.2,40,0004. Rs.3,06,3065. None of these
Answer» 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.

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.3,06,4002. Rs.2,96,3063. Rs.2,40,0004. Rs.3,06,3065. None of these

Answer» 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.