Assume it is the beginning of the year today. Ankita will earn INR 10,000 at the end of the year which she plans to invest in a bank deposit immediately at a fixed simple interest of 0.5% per annum. Her yearly income will increase by INR 10,000 every year and the fixed simple interest offered by the bank on new deposits will also increase by 0.5% per annum every year. If Ankita continues to invest all her yearly income in new bank deposits at the end of each year. the total interest earned by her in INR for five years from today will be?
Explanation:
Ankita earns Rs. 10,000 at the end of year 1 which is invested at 0.5% for 4 years. ∴ Interest earned = 10,000 × 0.5% × 4 = 200
Ankita earns Rs. 20,000 at the end of year 2 which is invested at 1% for 3 years. ∴ Interest earned = 20,000 × 1% × 3 = 600
Ankita earns Rs. 30,000 at the end of year 1 which is invested at 1.5% for 2 years. ∴ Interest earned = 30,000 × 1.5% × 2 = 900
Ankita earns Rs. 40,000 at the end of year 1 which is invested at 2% for 1 years. ∴ Interest earned = 40,000 × 2% × 1 = 800
∴ Total interest earned = 200 + 600 + 900 + 800 = 2500
Hence, 2500.
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