a deposit pays RS 1000 at the start of the year for a period of 5 years the rate of interest is 15 %compounded yearly what is the accumulated value of the deposit
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Explanation:
The formula for calculating compound interest is:
Compound interest = total amount of principal and interest in future (or future value) less principal amount at present (or present value)
= [P (1 + i)n] – P
= P [(1 + i)n – 1]
Where:
P = principal
i = nominal annual interest rate in percentage terms
n = number of compounding periods
Take a three-year loan of $10,000 at an interest rate of 5% that compounds annually. What would be the amount of interest? In this case, it would be:
$10,000 [(1 + 0.05) 3 – 1] = $10,000 [1.157625 – 1] = $1,576.25
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