Question

find th e future valueof an ordinary annuity with regular payment of P1000 at 5%compounded quarterly for 3years​

Answer 1

Answer:

1,157.625

Step-by-step explanation:

Compound Interest Formula-

P{1+r/100}^n

= 1000{1+5/100}³

= 1000{21/20}³

= 1000 × 9261/8000

= 9261/8

= 1,157.625

Therefore, the amount received annually through compound interest on Principal = 1000, Rate = 5% and Time = 3 years is Rs. 1,157.625.

Answer 2

Given,

The principal amount$\[ = 1000\]$

The rate of interest$\[ = 5\% \]$

The time period$\[ = 3{\rm{yrs}}\]$

Solutin,

Formula used, compound interest calculated quarterly$\[ = P{\left( {1 + \frac{{\frac{r}{4}}}{{100}}} \right)^{4t}} - P\]$

Therefore, the compound interest is

$\[\begin{array}{l} = 1000{\left( {1 + \frac{{\frac{5}{4}}}{{100}}} \right)^{4 \times 3}} - 1000\\ = 1000\left( {1 + \frac{5}{4} \times \frac{1}{{100}}} \right) - 1000\\ \approx 161\end{array}\]$

So, the future value is

$\[\begin{array}{l} = 161 + 1000\\ = 1161\end{array}\]$

Hence, the future value is Rs$\[1161\]$.