Question

An amount of $15,806 is paid quarterly for 3 years at a compounded quarterly interest of 6.8%

Answer 1

Given:

An amount of $15,806 is paid quarterly for 3 years at a compounded quarterly interest of 6.8%

To find:

The sum of money deposited

Solution:

The amount to be paid quarterly = $ 15806

The no. of years = 3 years

The rate of interest = 6.8%

Let "P" represent the sum of money.

We know the formula when the interest is compounded quarterly is as follows:

$\boxed{\bold{A = P [1 + \frac{\frac{R}{4} }{100} ]^4^n}}$

where

A = Amount

P = Principal

R = Rate of interest

n = no. of years

Now, substituting the given values in the formula above, we get

$15806 = P [1 + \frac{\frac{6.8}{4} }{100} ]^4^\times ^3}}$

$\implies 15806 = P [1 + \frac{1.7 }{100} ]^1^2}}$

$\implies 15806 = P [1 + 0.017 ]^1^2}}$

$\implies 15806 = P [1.017 ]^1^2}}$

$\implies P = \frac{15806}{1.2242}$

$\implies \bold{P = \ \:12911.28}$

Thus, the sum of money deposited is → $ 12911.28.

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