Multiple choice

A man saves Rs. 200 at the end of each year and lends the money at 5% compound interest. How much will it become at the end of 3 years?

  1. Rs. 565.25

  2. Rs. 635

  3. Rs. 662.02

  4. Rs. 666.50
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C Correct answer
AI explanation

Using the future value of an ordinary annuity formula, we calculate the value of the first deposit of Rs 200 over 3 years as 200(1.05)^3 = 231.525, the second over 2 years as 200(1.05)^2 = 220.5, and the third over 1 year as 200(1.05) = 210. The total accumulated amount is 231.525 + 220.5 + 210 = 662.025. The final amount is Rs 662.02.

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