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Question
What will Rs 125000 amount to at the rate of 6%, if the interest is calculated after every 3 months?
Solution
Because interest is calculated after every 3 months, it is compounded quarterly.
Given:
P = Rs 125, 000
\[\text{ R }= 6 \%\text{ p . a . }= \frac{6}{4} \%\text{ quarterly }= 1 . 5 % quarterly\]
n = 4
So,
\[A = P \left( 1 + \frac{R}{100} \right)^n \]
\[ = 125, 000 \left( 1 + \frac{1 . 5}{100} \right)^4 \]
\[ = 125, 000 \left( 1 . 015 \right)^4 \]
= 132, 670 (approx)
Thus, the required amount is Rs 132, 670.
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