Question

A person closes his account in an investment scheme by withdrawing Rs. 10,000. One year ago he had withdrawn Rs. 6000. Two years ago he had withdrawn Rs. 5000. Three years ago he had not withdrawn any money. How much had he deposited approximately at the time of opening the account 4 years ago, if the annual simple interest rate is 10%?

• A. Rs. 15600
• B. Rs. 16500
• C. Rs. 17280
• D. None of these

Hint:

For simple interest with staggered withdrawals, back-calculate year by year, adding interest before each withdrawal.

Answer 1

The Correct Option is A

Let the original deposit be \(P\). Interest each year = \(0.1P\) (since simple interest at \(10%\) p.a.). Work backwards from the final year: - End of 4th year: withdrew Rs. 10,000 ⇒ this amount was the remaining principal + interest for the 4th year.
- Add back the interest for that year to find the amount at the start of that year.
- Repeat the process for the previous years adding the respective withdrawals and interest.
This back-calculation yields \(P \approx 15600\).