Question

a sum of 8000 is compounded annually for 3 years if the rate of interest in 10% per annum for the first year 12% per annum for the second year and 15% per annum for the third year then what is the amount at the end of 3rd years?​

Answer 1

the amount at the end of the third year is A3 = $11,330.40.

Explanation:

To solve this problem, we can use the formula for compound interest:

A = P(1 + r/n)^(n*t)

Where:

A = the final amount

P = the principal (initial amount)

r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per year

t = the number of years

For the first year, the interest rate is 10%, so we have:

A1 = 8000(1 + 0.1/1)^(1*1)

A1 = 8800

After the first year, the principal becomes 8800. For the second year, the interest rate is 12%, so we have:

A2 = 8800(1 + 0.12/1)^(1*1)

A2 = 9856

After the second year, the principal becomes 9856. For the third year, the interest rate is 15%, so we have:

A3 = 9856(1 + 0.15/1)^(1*1)

A3 = 11330.4

Therefore, the amount at the end of the third year is A3 = $11,330.40.

In summary, the initial amount of $8,000 is compounded annually for three years at different interest rates. By using the formula for compound interest, we find that the amount at the end of the third year is $11,330.40.