Question

John deposits R900,00 into a savings account paying 6,5% interest per year, compounded quarterly. After three and a half years he withdraws R1000,00 from the account. How much is the total amount accrued in the account two years after withdrawing the R1000,00? The correct answer, rounded to the nearest rand, is

Answer 1

Total amount accrued in the account two years after withdrawing the Rs.1000,00 = 145.43 Rs.

Given:

John deposits Rs.900,00 into a savings account paying

6.5% interest per year, compounded quarterly.

After three and a half years he withdraws Rs.1000,00 from the account.

Find:

How much is the total amount accrued in the account two years after withdrawing the Rs.1000,00?

Formula used:

Interest is compounded quarterly.

Amount = p×$(1+\frac{r}{4\times100})^4^n$

Where, n = Number of years

Explanation:

First we calculate amount after 3.5 year.

Amount = p×$(1+\frac{r}{4\times100})^4^n$

Amount = 900×$(1+\frac{6.5}{4\times100})^4^{\times 3.5}$

Amount = 1127.84 Rs.

After three and a half years he withdraws Rs.1000,00 from the account.

So Remaining amount = 1127.84 -1000 = 127.84 Rs.

So amount after 2 year for the remaining amount,

Amount = p×$(1+\frac{r}{4\times100})^4^n$

Amount = 127.84×$(1+\frac{6.5}{4\times100})^4^{\times 2}$

Amount =  145.43 Rs.

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