Q.

1
A deposit of Rs. 6000 in a Bank account earns interest 5% compounded monthly for four years. How
much amount is accumulated in the account after 4 years?

Solution:
Deposit P = 6000 RS

.r = 5% = 5/100 = 0.05

Term t = 4 years

n = 12

A=?

Accumulated amount A = 7336.8 RS.

Q.2
A 55-inch segment is divided into three parts whose lengths have the ratio 2 : 4 : 5. What is the length of
the longest part?

Solution:
Total length = 55-inch

Ratio is = 2 : 4 : 5

Sum of ratios =11

Length of longest part = (5/11)*55 inches = 25 inches .

Q.3

Suppose that you establish an IRA (Individual Retirement Account) at age 43 and you will retire
after 22 years hence at age 65. You plan to make annual payments of Rs1000 into the IRA at the
beginning of each year. If you assume a rate of return of 8.5 percent a year, calculate the future
value of your IRA when you will retire at age 65.

Solution: