Question

Heera invests rs. 20,000 at the beginning of every year in a bank and earns 10 % annual interest, compounded at the end of the year. what will be her balance in the bank at the end of three years?

A. Rs.33111
B. Rs.26620
C. Rs.85500
D. Rs.66699

Answer 1

The balance in the bank at the end of three years will be Rs. 26,620. Therefore, the correct option is B.

Step-by-step explanation:

To calculate the balance in the bank at the end of three years, we need to calculate the compound interest for each year. The rate of interest is 10% and it is compounded annually.

After the first year, the balance will be Rs. 20,000 * (1 + 0.10) = Rs. 22,000.

After the second year, the balance will be Rs. 22,000 * (1 + 0.10) = Rs. 24,200.

After the third year, the balance will be Rs. 24,200 * (1 + 0.10) = Rs. 26,620.

Therefore, the balance in the bank at the end of three years will be Rs. 26,620.