Question

Sudershan deposited Rs. 32000 in a bank, where the interest is credited quarterly. If the rate of interest be 5% per annum, what amount will he receive after 6 months?

Answer 1

Present value, P = Rs.32000 

Interest rate, R = 5% per annum 

Time, n = 6 months = (1/2) years 

∵ Compounded quarterly, 

∴ Amount (A) = P [1 + (R/4)/100]⁴ⁿ [Where, P = Present value 

R = Annual interest rate 

n = Time in years] 

∴ A = 362000 [1 + (5/4)/100]² [4n = 4 × 1/2] 

⇒ A = 32000 [1 + 1/80]² 

⇒ A = 32000 [81/80]² 

⇒ A = 32000 × 81/80 × 81/80 

⇒ A = 400 × 81 × 81/80 

⇒ A = 5 × 81 × 81 

⇒ A = 32805 

∴ Amount = Rs.32805 

∴ Sudershan will receive amount of Rs.32805 after 6 months.