If you deposit Rs. $500$ in an account that earns $5 %$ compounded quarterly, then what would be the balance in that account after $4$ years?

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Solution

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. $500, r = 5 %, n = 4$ and $t = 4$ years
$A = 500 (1 + \frac{0.05}{4})^{4.4}$
$A = 500 \times {1.0125}^{1} 6$
$A = 500 \times 1.21989$
$A =$ Rs. $609.95$

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