Question

if you want to has rupees 80000 after 5 years how much should you deposit every year if the bank offers 12% per annum interest compounded quarterly


Pls help

Answer 1

The sum of Rs. 44294.06 should be deposited every year if the bank offers 12% per annum interest compounded quarterly.

Step-by-step explanation:

Required Formula:

• Amount, A = P [1 + $\frac{\frac{R}{4}}{100}$]⁴ⁿ

 Amount to be received after 5 years i.e., A = Rs. 80000

Since the interest is compounded quarterly,

The rate of interest = R/4 = 12/4 = 3% per quarter

The time period = 4*n = 4*5 = 20 quarters

Let the sum of money to be deposited every year be denoted as "P"

Now, substituting the given values in the formula, we get

80000 = P [1 + $\frac{3}{100}$]²⁰

⇒ 80000 = P [$\frac{103}{100}$]²⁰

⇒ 80000 = P [1.03]²⁰

⇒ 80000 = P × 1.806

⇒ P = $\frac{80000}{1.806}$

⇒ P = Rs. 44294.06

Thus, Rs. 44294.06 should be deposited every year.

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