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.

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