The situation
A family starts with ₹4 lakh. Assume 8% annual growth for six years and no interim cash flows.
Your task
Will the balance reach ₹6.5 lakh?
Reveal step-by-step solution
Set up the problem
Apply six growth periods to the opening balance.
Work through the numbers
Future value = ₹4 lakh × 1.08⁶ ≈ ₹6.35 lakh. Required initial balance = ₹6.5 lakh ÷ 1.08⁶ ≈ ₹4.10 lakh.
Interpret the result
The forecast falls short by about ₹15,250 at year six. The growth rate is an exercise assumption.
What to remember
Count compounding periods and distinguish a year-six shortfall from a deposit needed today.