Kishore invested Rs. 50000 in 12% per annum compound interest where the interest is calculated quarterly. What is the approximate amount received by him at the end of one year?Question 16Answera.Rs. 56275b.Rs. 66275c.Rs. 56285d.Rs. 59275
Question
Kishore invested Rs. 50000 in 12% per annum compound interest where the interest is calculated quarterly. What is the approximate amount received by him at the end of one year?Question 16Answera.Rs. 56275b.Rs. 66275c.Rs. 56285d.Rs. 59275
Solution
The formula for compound interest is A = P(1 + r/n)^(nt), where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (in decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for in years.
Given in the problem:
- P = Rs. 50000
- r = 12% per annum = 0.12 (in decimal)
- n = 4 (since interest is compounded quarterly)
- t = 1 year
Substituting these values into the formula:
A = 50000(1 + 0.12/4)^(4*1) A = 50000(1 + 0.03)^4 A = 50000 * 1.03^4 A = 50000 * 1.1255 A = Rs. 56275 approximately
So, the approximate amount received by him at the end of one year is Rs. 56275. Therefore, option a. Rs. 56275 is the correct answer.
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