Question
Karan invested Rs. 30,000 at simple interest of 8% p.a. If he kept withdrawing Rs. 6,000 after every one year, then find the total interest earned by Karan 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
= 30000 × 8 × 1 ÷ 100 = Rs. 2,400
And interest earned in the second year
= (30000 − 6000) × 8 × 1 ÷ 100 = Rs. 1,920
And interest earned in the third year
= (30000 − 12000) × 8 × 1 ÷ 100 = Rs. 1,440
So, total interest earned = 2400 + 1920 + 1440 = Rs. 5,760
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