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28 Aug 2009, 05:02
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How much interest will $2400 earn at an annual rate f 8% in one year if interest is compounded every four months?
a. 141
b. 150
c. 197
d. 234
e. 312
OA Please explain.
a. 141
b. 150
c. 197
d. 234
e. 312
OA Please explain.
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28 Aug 2009, 06:06
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this is formula based sum...use compound interest formula only add interval to this formula for compounding
interval is generally 1 as annually compounded....but here it is compounded 4 months in year that is 3 times a year hence interval (i) = 3
no of years = 1
A = P (1+(r/100))^n.....where r = 8/i & n = i*no of years
A = 2400*((1+(8/300))^3) = 2597.16 ......Then Interest = A -P........2597.16 - 2400 = 197.16 = $ 197
Hence OA C
interval is generally 1 as annually compounded....but here it is compounded 4 months in year that is 3 times a year hence interval (i) = 3
no of years = 1
A = P (1+(r/100))^n.....where r = 8/i & n = i*no of years
A = 2400*((1+(8/300))^3) = 2597.16 ......Then Interest = A -P........2597.16 - 2400 = 197.16 = $ 197
Hence OA C
29 Aug 2009, 06:44
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C.I = P*(1 + r/n)^nT
Here, P = Principle amount = 2400
r = rate of interest in % = 8%
n = number of times the interest is compounded = 12/4 = 3
T = Time duration = 1 year
= 2400*(1 + 8/(100*3))^3*1
= 2400*(1.082)
= 2400 (1 + 0.082)
C.I formula gives the total amount with interest.
So interest earned = C.I - P = 2400 (1 + 0.082) - 2400
= 2400*0.082
= 196.8
Hence, approximate answer is C..
Here, P = Principle amount = 2400
r = rate of interest in % = 8%
n = number of times the interest is compounded = 12/4 = 3
T = Time duration = 1 year
= 2400*(1 + 8/(100*3))^3*1
= 2400*(1.082)
= 2400 (1 + 0.082)
C.I formula gives the total amount with interest.
So interest earned = C.I - P = 2400 (1 + 0.082) - 2400
= 2400*0.082
= 196.8
Hence, approximate answer is C..
