Sudershan deposited Rs. 32000 in a bank, where the interest is credited quarterly. If the rate of interest be 5% per annum, what amount will he receive after 6 months?
Present value, P = Rs.32000
Interest rate, R = 5% per annum
Time, n = 6 months = (1/2) years
∵ Compounded quarterly,
∴ Amount (A) = P [1 + (R/4)/100]4n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 362000 [1 + (5/4)/100]2 [4n = 4 × 1/2]
⇒ A = 32000 [1 + 1/80]2
⇒ A = 32000 [81/80]2
⇒ A = 32000 × 81/80 × 81/80
⇒ A = 400 × 81 × 81/80
⇒ A = 5 × 81 × 81
⇒ A = 32805
∴ Amount = Rs.32805
∴ Sudershan will receive amount of Rs.32805 after 6 months.