Question

If 125250 is invested for 25 years at the interest rate of 7.25%,compounding quaterly, how much we will get after 25 years( principal plus interest).

Answer 1

Answer:

P = 125250

n = 25 yrs

r = 7.25% = 0.0725

here, the principal is compounding quarterly

that is,

✓principal is being increased after every 12/4=3 months

✓25 yrs=(25×3)=75 yrs

we know,

$c \\ = p(1 + r) ^{n} \\ = 125250(1 + 0.0725) ^{75} \\ = 125250 \times {1.0725}^{75} \\ = 125250 \times 190.4573 \\ = 23854773.58$