Multiple choice

Find the amount on a deposit of Rs. $2100$, earning $4$% interest compounded quarterly for $2$ years(approx.).

  1. $2272$
  2. $2372$
  3. $2472$
  4. $2572$
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A Correct answer
Explanation

Principal = 2100, Rate = 4% per annum, compounded quarterly = 1% per quarter. Time = 2 years = 8 quarters. Amount = 2100 * (1 + 0.01)^8 = 2100 * (1.01)^8. 1.01^8 is approx 1.0828. 2100 * 1.0828 = 2273.88. The closest option is 2272.

AI explanation

Using the compound interest formula Amount = Principal times (1 + Rate divided by 100 times n) raised to the power of (n times Time), we get Amount = 2100 times (1 + 1 divided by 100) raised to the power of 8. This simplifies to 2100 times 1.01 raised to the power of 8, which is approximately 2100 times 1.0828. The final amount is therefore approximately Rs. 2272.

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