At the beginning of the 1972/75 school year a man invested #200000 in a bank at121/2 compound interest.IF he withdrew #65000 at the end of each school year after payment of interest to pay his son's school fees,how much did he have left atthe beginning of the 1978/79 school year.
To find out how much the man had left at the beginning of the 1978/79 school year, we need to calculate the compound interest for each year and subtract the school fees withdrawn.
Here are the steps to calculate the amount the man had left:
Step 1: Calculate the interest rate per period:
The interest rate per period is given as 12.5% or 12.5/100 = 0.125.
Step 2: Calculate the amount after the interest is added for the first year:
Initial amount = #200,000
Interest for the first year = Initial amount * interest rate per period
Amount after interest for the first year = Initial amount + Interest for the first year
Step 3: Calculate the amount after each year, considering the withdrawal of school fees:
Repeat the following steps for each school year until the 1978/79 school year:
- Subtract the school fees withdrawn at the end of the school year.
- Calculate the interest for that year based on the remaining amount.
- Add the interest to the remaining amount.
Step 4: Repeat Step 3 for each school year until the 1978/79 school year.
In this case, there are 6 school years from 1972/75 to 1978/79. So, you need to repeat Step 3 six times.
Step 5: Calculate the final amount the man had left at the beginning of the 1978/79 school year.
By following these steps, you can calculate the exact amount the man had left at the beginning of the 1978/79 school year.