Compound Interest

Saumyojit said:
@Dr.Peterson
@MissKoa1a
@Jomo

See now i know what i am doing

My logic is that : I am considering the 3 years to be duration time of each deposit of each 200 rupees from the time i am lending . Thats why my each amt after 3 years is coming 231.5 of each 3 year set which when added gives me 231.5 ^ infinte .

But in the question 3 years means "I think the "at the end of 3 years" is 3 years from now, not 3 years from each deposit".

i think it is a english misread interpretation of mine
Click to expand...
Did you resolve the questions you had asked in:

https://www.freemathhelp.com/forum/threads/cinterest.120288/

As you see, solving word problem requires "clear questions". The confusion arises when the "problems" are translated. In this "translated" problem:
"
A man saves Rs. 200 at the end of each year and lends the money at 5% compound interest. How much will it become at the end of 3 years?

My approach was:
Principle=200

Amt at end of 3 years = 200(1+ 5/100)^3=200 * 105/100 *105/100 *105/100 = 231.525
is this wrong?"

You calculated "future value" of only one installment - at the end of 3 years. So your approach and calculations were wrong (incomplete).

You did not consider rest of the installments.

For any word problem, WRITE down the "FIND" of the problem - and tell us so that we avoid working through your misinterpretation.
 
The man is making three loans (you might want to say two which is fine).

So do three separate problem, one for each loan and in the end add everything up.

The unusual part is at the end of the 3rd year he loans out another $200. Since the problem ends right there the question is do we include the last $200 as money that he has?

You need to make some assumptions in this problem and if you expect everyone here who is trying to help you to arrive at the same answer you must inform us of you (reasonable) assumptions.

Year 0. The man starts saving up $200.
Year 1: He saved up $200 and loaned it out at 5% interest per year.
Year 2: He saved up another $200 and loaned it out at 5% interest per year. He also earned his 5% from the 1st loan.
Year 3. He saved up another $200 and loaned it out at 5% interest per year. He also received another 5% from the loan he made in year 1. He also received 5% on the loan he made in year 2.

Now we need to know if right after year 3 does he get back all his money including interest? Let's assume he does. So how much money does he have after three years?
 
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Actually I had enough of this problem. Here is the way to do it.

After saving up $200 after the 1st year he loans out that money for 2 years. How much does he have in total after two years?

After saving up another $200 after the 2nd year he loans out the money for 1 year. How much does he have after 1 year?

After the 3rd year he saves up yet another $200 which he can not loan out as time ran out. So how much money does he have from this last $200?

Add up the 3 amounts and show us your work.

Is there anything which you did not understand? Please remember that you are doing three separate problems.
 
U both did not understand my situation.
U are thinking that I have the same doubt which I asked in the original post.That was in the beginning.
But in the lieu of doing the sum I generated another doubt.
This one:

My logic is that : I am considering the 3 years to be duration time of each deposit of each 200 rupees from the time i am lending . Thats why my each amt after 3 years is coming 231.5 of each 3 year set which when added gives me 231.5 ^ infinte .

But in the question 3 years means "I think the "at the end of 3 years" is 3 years from now, not 3 years from each deposit"
 
Saumyojit said:
U both did not understand my situation.
U are thinking that I have the same doubt which I asked in the original post.That was in the beginning.
But in the lieu of doing the sum I generated another doubt.
This one:

My logic is that : I am considering the 3 years to be duration time of each deposit of each 200 rupees from the time i am lending . Thats why my each amt after 3 years is coming 231.5 of each 3 year set which when added gives me 231.5 ^ infinte .

But in the question 3 years means "I think the "at the end of 3 years" is 3 years from now, not 3 years from each deposit"
Click to expand...
Over and out. 10 - 4
 
Saumyojit said:
But in the question 3 years means "I think the "at the end of 3 years" is 3 years from now, not 3 years from each deposit"
Click to expand...
If from now you mean the start of the three years then you are correct. That is the exact method I showed above.

Over and out!
 
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