Mr. Shivam Goyal deposits Rs. 2000 at the end of every year for five years into his account. Interest is being compounded annually at a rate of 5%. Determine the amount of money he will have at the end of the fifth year.
To solve this problem, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money at the end
P = the principal amount (initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, the principal amount (initial deposit) is Rs. 2000, the annual interest rate is 5% (0.05 as a decimal), interest is compounded annually (n = 1), and the number of years is 5.
Substituting these values into the formula:
A = 2000(1 + 0.05/1)^(1*5)
= 2000(1.05)^5
≈ 2000(1.27628)
≈ 2552.56
Therefore, Mr. Shivam Goyal will have approximately Rs. 2552.56 in his account at the end of the fifth year.