Question
Amit invested Rs. 20,000 at simple interest of 10% p.a. If
he withdrew Rs. 4,000 after every one year, then find the total interest earned by Amit at the end of three years. [Consider that the interest is payable at the end of three years only]Solution
Simple interest = Sum × Rate × Time ÷ 100
So, interest earned in the first year
= 20000 × 10 × 1 ÷ 100 = Rs. 2000
Interest earned in the second year
= (20000 − 4000) × 10 × 1 ÷ 100 = Rs. 1600
Interest earned in the third year
= (20000 − 8000) × 10 × 1 ÷ 100 = Rs. 1200
So, total interest earned = 2000 + 1600 + 1200 = Rs. 4,800
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