Question:
What will Rs 125000 amount to at the rate of 6%, if the interest is calculated after every 3 months?
Solution:
Because interest is calculated after every 3 months, it is compounded quarterly.
Given :
$\mathrm{P}=\mathrm{Rs} 125,000$
$\mathrm{R}=6 \%$ p. a. $=\frac{6}{4} \%$ quarterly $=1.5 \%$ quarterly
$\mathrm{n}=4$
So,
$\mathrm{A}=\mathrm{P}\left(1+\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$=125,000\left(1+\frac{1.5}{100}\right)^{4}$
$=125,000(1.015)^{4}$
$=132,670($ approx $)$
Thus, the required amount is Rs 132,670 .
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