Question

If the conversion period is one year, the amount due at the end of $n$ years $=$?If Principle amount is $P$ and rate is $r\%$ p.a.

• A. $P{\left[1-\frac{r}{100}\right]}^n$
• B. $P{\left[1-\frac{n}{100}\right]}^r$
• C. $P{\left[1+\frac{r}{100}\right]}^n$
• D. None of the above

Answer 1

The correct option is C $P{\left[1+\frac{r}{100}\right]}^n$

If the conversion period is of one then rate will be,

$\frac{r\%}{1}=\left(\frac{r}{1}\right)\%$

No. of interest periods$\left(N\right)=\left(1\right)n=1n$

Now, $A=P(1+\frac{r}{100}{)}^n$

$⟹A=P(1+\frac{r}{100}{)}^n$