Question
Neha invested Rs. 25,000 at simple interest of 12% p.a. If
she kept withdrawing Rs. 5,000 after every one year, then find the total interest earned by Neha at the end of three years. [Consider that the interest is payable at the end of three years, only]Solution
Simple interest = Sum × rate of interest × time period ÷ 100
So, interest earned in the first year
= 25000 × 12 × 1 ÷ 100 = Rs. 3,000
And interest earned in the second year
= (25000 − 5000) × 12 × 1 ÷ 100 = Rs. 2,400
And interest earned in the third year
= (25000 − 10000) × 12 × 1 ÷ 100 = Rs. 1,800
So, total interest earned = 3000 + 2400 + 1800 = Rs. 7,200
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