Multiple choice

An account earning $4.4$% interest compounded quarterly for $5$ years would have a balance of how much if the principal was Rs. $1500$?

  1. $1867$
  2. $1967$
  3. $2067$
  4. $1964$
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A Correct answer
Explanation

Compound interest formula: A = P(1 + r/n)^(nt). A = 1500(1 + 0.044/4)^(4*5) = 1500(1.011)^20. 1500 * 1.2446 = 1866.9, which rounds to 1867.

AI explanation

Using the compound interest formula Amount = Principal times (1 + Rate divided by 400) raised to the power of (4 times Time), we substitute the given values to get Amount = 1500 times (1 + 4.4 divided by 400) raised to the power of 20. This simplifies to 1500 times 1.011 raised to the power of 20, which is approximately 1500 times 1.244. The final balance is approximately Rs. 1867.

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