Question

What will be the amount after 2 years on a Principal “P” if compounding is done on a quarterly basis?

A P*(1+r/4)4 Correct Answer Incorrect Answer
B P*(1+r/4)8 Correct Answer Incorrect Answer
C P*(1+r/4)2 Correct Answer Incorrect Answer
D P/4*(1+r)8 Correct Answer Incorrect Answer
E P/4 *(1+r/4)2 Correct Answer Incorrect Answer

Solution

If the compounding is done more than once in a year, then A = P*(1+ )m*t Where, ·       m = no. of periods in a year when compounding is being done ·       R = rate of interest p.a ·       t = time in years

Practice Next
×
×