The effective rate of interest for one year corresponding to a nominal at 7% rate of interest per annum
convertible quarterly is
(a) Rs. 240
(b) Rs. 200
(c) Rs.220
(d) Rs.210
Answers
Given :- The effective rate of interest for one year corresponding to a nominal at 7% rate of interest per annum convertible quarterly is ?
(a) 7%
(b) 7.5%
(c) 7.18%
(d) 5% .
Solution :-
Let us assume that, Principal is Rs.100 and time is 1 year.
since rate is given 7% per annum convertible quarterly.
So,
- Rate of interest = (Rate/4)
- Time = Time * 4 .
than,
- Rate = (7/4)%
- Time = 1 * 4 = 4 years.
we know that,
- Amount = P[ 1 + (R/100)]^(time)
Putting all values now, we get,
→ A = 100[ 1 + (7/4 * 1/100)]⁴
→ A = 100[1 + (7/400)]⁴
→ A = 100[1 + 0.0175]⁴
→ A = 100(1.0175)⁴
→ A = 100 * (1.0718)
→ A = Rs.107.18
Therefore,
→ Interest recieved = A - P = 107.18 - 100 = Rs.7.18
Hence,
→ Required Effective rate = (7.18 * 100)/100 = 7.18% (Option C) (Ans.)
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Answer:
210
Step-by-step explanation:
I don't know step but I know answer