Question

Eden lends Rs. $4000$ to John at an interest rate of only $6\%$ per year compounded quarterly. Find the balance that John has to return at the end of $2$ 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. $4000,r=6\%,n=4$ and $t=2$ years
$A=4000{(1+\frac{0.06}{4})}^{4.2}$
$A=4000\times {1.015}^8$
$A=4000\times 1.126493$
$A=$ Rs. $4505.97$