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A person invested Rs. 1000000 in a bank FDR @ 12% p.a. for 1 year. If interest is compounded on quarterly basis, the amount payable shall be ......
a. 1095209
b. 1125509
c. 1130509
d. 1145509
Ans - b
Solution:
P = 1000000
R = 12% / 4 = 0.03 (since compounding is quarterly, rate is divided by 4)
T = 1*4 = 4 (since compounding is quarterly, time is multiplied by 4)
Since compounding is quarterly and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 1000000 * (1+0.03)^4
= 1000000 * 1.125509
= 1125509
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A person invested Rs. 100000 in a bank FDR @ 6% p.a. for 1 year. If interest is compounded on quarterly basis, the amount payable shall be ......
a. 106136
b. 106316
c. 116136
d. 116316
Ans - a
Solution:
P = 100000
R = 6% / 4 = 0.015 (since compounding is quarterly, rate is divided by 4)
T = 1 *4 = 4 (since compounding is quarterly, time is multiplied by 4)
Since compounding is quarterly and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 100000 * (1+0.015)^4
= 100000 * 1.06136
= 106136
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A person invested Rs. 100000 in a bank FDR @ 6% p.a. for 1 year. If interest is compounded on half-yearly basis, the amount payable shall be ......
a. 105080
b. 106090
c. 108050
d. 109060
Ans - b
Solution:
P = 100000
R = 6% / 2 = 3% (since compounding is semi-annually, rate is divided by 2
T = 1 *2 = 2 (since compounding is semi-annually, time is multiplied by 2)
Since compounding is semi-annually and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 100000 * (1+0.03)^2
= 100000 * 1.0609
= 106090 Ans.
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A person invested Rs. 100000 in a bank FDR @ 6% p.a. for 1 year. If interest is compounded on yearly basis, the amount payable shall be ......
a. 100600
b. 100500
c. 106000
d. 105000
Ans - c
Solution:
P = 100000
R = 6% yearly
T = 1 yr
Since compounding is annualy and its only 1-time investment, the formula to be used:
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FV = P * (1+R)^T
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So,
FV = 100000 * (1+0.06)^1
= 100000 * 1.06
= 106000
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