Question

Bala borrowed Rs. $4000$ from a bank at the interest rate of $10\%$ per annum compounded quarterly. What would be the amount payable to bank after $5$ years

Answer 1

We know the formula,

$A=P{(1+\frac{r}{n})}^{n.t}$

Where,
$A=$ total amount
$P=$ principal or amount of money deposited,
$r=$ annual interest rate
$n=$ number of times compounded per year
$t=$ time in years

Given:
$P=$ Rs. $4000,r=10\%,n=4$ and $t=5$ years

$\therefore A=4000{(1+\frac{0.1}{4})}^{4\times 5}$

$\Rightarrow A=4000\times {1.025}^{20}$

$\Rightarrow A=4000\times 1.638616$

$\therefore A=$ Rs. $6554.46$