A man closes his account in a bank by withdrawing Rs. 1,10,000. One year earlier, he had withdrawn Rs. 65,000. Two years earlier, he had withdrawn Rs. 1,25,000. How much money had he deposited at the time of opening the account 3 years ago if the annual interest rate was 10% compounded annually?
Solution
Tip- For interests that are easier to solve (such as 10%), we shall directly add the compound interest to the amount 'x', and it becomes 1.1x or 1.1*1.1x and so on.
Assuming the initial deposit to be x three years back.
After one year, it became 1.1x, from which 1,25,000 was withdrawn. Hence, the remaining amount was (1.1x - 1,25,000).
After the second year, the amount would have become (1.1x - 1,25,000)*1.1, from which 65,000 was withdrawn. Hence, the remaining amount was (1.21x- 2,02,000).
After the third year, the amount would have become (1.21x- 2,02,000)*1.1, from which 1,10,000 was withdrawn and the account was closed. Hence, the remaining amount is 0.
1.331x-3,32,200=0
x=2,50,000
