Question

Anna deposited rupees 20,000 in a bank which compounds interest quarterly the annual rate of interest is 16% How much would Anna get after 6 months?​

Answer 1

your answer is rs.21600

Answer 2

Solution!!

The concept of compound interest has to be used here. The principal, rate of interest and time is given in the question. It is compounded quarterly. We have to find the amount.

Principal (P) = Rs 20,000

Rate of interest (R) = 16%

Time (T) = 6 months = 0.5 years

The rate of interest has to be divided by 4 and the time has to be multiplied by 4.

Rate of interest (R) = 16 ÷ 4 = 4

Time (T) = 0.5 × 4 = 2

Now, let's find the amount.

Amount = P(1 + (R/100))ᵀ

Amount = 20,000(1 + (4/100))²

Amount = 20,000(1 + (1/25))²

Amount = 20,000(26/25)²

Amount = 20,000 × (26/25) × (26/25)

Amount = 32 × 26 × 26

Amount = Rs 21,632

Hence, the amount is Rs 21,632.