A man deposited ₹7,505 on March 18 when the rate of interest was 3⅓% p.a. The rate of interest was raised to 3¾% p.a. on 16th May and then it was reduced to 3¼% p.a. on 1st August. Calculate interest payable on 25th November.
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Step-by-step explanation:
Assuming real time (rather than bankers time), we have:
Jan 3 to Feb 2: 31 days
Feb 3 to Mar 2: 28 days
Mar 3 to Mar 17: 15 days
31 + 28 + 15 = 74 days
Assuming once-yearly compounding:
3650(1 + 0.1)^(74/365) = 3721.21537...
...or Rs 3,721.22 as an ending balance. Then the interest earned is:
Rs 3,721.22 - Rs 3,650 = Rs 72.22
interest earned, under the above-stated assumptions:
72.22 rupees
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