Question

find the present value of rs.50000 to be received at the end of 4 yrs at 12 percent interest compounding quarterly​

Answer 1

Explanation:

present value = 8156

total interest = 41844

Answer 2

Given,

Rs. 50000 to be received at the end of 4 yrs at 12 percent interest.

To Find,

The present value compounded quarterly =?

Solution,

We can solve the question as follows:

It is asked that we have to find the value of Rs. 50000 to be received at the end of 4 yrs at 12 percent interest compounding quarterly​.

$Principal\: amount = Rs\: 50000$

$Time = 4\: years$

$Rate = 12$%

The formula for finding the amount that is compounded quarterly is given as:

$Amount = Principal(1 + \frac{Rate}{4*100})^{4*Time}$

Substituting the values in the above formula,

$Amount = 50000(1 + \frac{12}{4*100} )^{4*4}$

                               $= 50000(1 + 0.03 )^{16}$

                               $= 50000(1.03 )^{16}$

                               $=50000*1.60$

                               $= 80000$

Hence, the present value of Rs. 80000.