To solve this problem, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money at the end
P = the principal amount (initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, the principal amount (initial deposit) is Rs. 2000, the annual interest rate is 5% (0.05 as a decimal), interest is compounded annually (n = 1), and the number of years is 5.
Substituting these values into the formula:
A = 2000(1 + 0.05/1)^(1*5)
= 2000(1.05)^5
≈ 2000(1.27628)
≈ 2552.56
Therefore, Mr. Shivam Goyal will have approximately Rs. 2552.56 in his account at the end of the fifth year.
Mr. Shivam Goyal deposits Rs. 2000 at the end of every year for five years into his account. Interest is being compounded annually at a rate of 5%. Determine the amount of money he will have at the end of the fifth year.
1 answer