Instructions

Read the following information and answer the questions that follows: Ghosh Babu deposited a certain sum of money in a bank in 1986. The bank calculated interest on the principal at 10 percent simple interest, and credited it to the account once a year. After the 1st year, Ghosh Babu withdrew the entire interest and 20% of the initial amount. After the 2nd year, he withdrew the interest and 50% of the remaining amount. After the 3rd year, he withdrew the interest and 50% of the remaining amount. Finally after the 4th year, Ghosh Babu closed the account and collected the entire balance of Rs. 11,000.

Question 58

The year, at the end of which, Ghosh Babu withdrew the smallest amount was:

Solution

Let's say the principal amount is P, Rate is R (i.e. R = 10%)

1st withdrawal = $$PR+ \frac{P}{5} = \frac{15P}{50}$$

2nd withdrawal = $$\frac{4PR}{5}+ \frac{2P}{5}$$ = $$\frac{24P}{50}$$

3rd withdrawal = $$\frac{2PR}{5} + \frac{P}{5}$$ = $$\frac{12P}{50}$$

4th withdrawal = $$\frac{PR}{5} + \frac{P}{5}$$ = $$\frac{11P}{50}$$

Lowest withdrawal was after the fourth year.