Question

A bond has a maturity value of 5000 rupees at the end of 2 years . The initial investment to be made for interest rate , i = 5% is
A) 7850 rupees
B) 1965 rupees
c) 4535 rupees
d) 3254 rupees​

Answer 1

Explanation:

Here P = 5000

r=4%

time = 1 year

As the amount is compounded annually n = 2

Compound interest formula =

A= 5202

So Interest earned = 5202 - 5000 = 202

hope you got it

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