Shikha deposited Rs 2000 in a bank that pays 6% simple interest. She withdraws 700 at the end of the first year. What will be her balance after 3 years?

Given:

Shikha deposited Rs. 2000 in a bank that pays 6% simple interest. She withdraws Rs. 700 at the end of the first year.

To find: Here we have to find her balance after 3 years.

Solution:

For 1st year:

Principal amount (P) = Rs. 2000

Rate (R) = 6%

Time (T) = 1 year

So,

Simple Interest (SI) = $\frac{P\ \times \ R\ \times \ T}{100}$

Simple Interest (SI) = $\frac{2000\ \times \ 6\ \times \ 1}{100}$

Simple Interest (SI) = Rs 120

Now,

Total amount after first year = Principle amount $+$ Interest $-$ Amount withdrawn by shikha

Total amount after first year = 2000 $+$ 120 $-$ 700

Total amount after first year = Rs. 1420

For next two years:

Principal amount (P) = Rs. 1420

Rate (R) = 6%

Time (T) = 2 years

So,

Simple Interest (SI) = $\frac{P\ \times \ R\ \times \ T}{100}$

Simple Interest (SI) = $\frac{1420\ \times \ 6\ \times \ 2}{100}$

Simple Interest (SI) = Rs 170.40

Now,

Total amount after three year = Principle amount $+$ Interest

Total amount after three year = 1420 $+$ 170.40

Total amount after three year = Rs. 1590.40

So, balance in Shikha's account after 3 years is Rs. 1590.40.

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Updated on: 10-Oct-2022

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