Question

Azam & Moazzam invested Rs. 10 million each compounded quarterly for 5 years. After 5 year azam has 20% more
than Moazzam. Azam rate is 10%. Find rate of Moazzam.​

Answer 1

Answer:

Azam & Moazzam invested Rs. 10 million each compounded quarterly for 5 years.

Azam rate is 10%.

For Azam

Calculate:

Total P+I (A)

Where: A = P(1 + r/n)^(nt)

Principal (P): $ 10.00

Rate (R): % annual 10

Compound (n): Compounding Annually (1/Yr)

Time (t in years): 5

Answer:

A = $ 16.11

A = P + I where

P (principal) = $ 10.00

I (interest) = $ 6.11

After 5 year azam has 20% more than Moazzam.

Azam = 120/100*Moazzam

$16.11 = \frac{120}{100} \times x \\ x = 16.11 \times \frac{5}{6} = 13.425$

So for Moazzam

Calculate:

Rate (R)

Where: r = n[(A/P)^(1/nt) - 1]

Total P+I (A): $ 13.43

Principal (P): $ 10.00

Compound (n): Compounding Annually (1/Yr)

Time (t in years): 5

Answer:

R = 6.068% per year