Question

# Rahul deposits \$5000.00 in an account on April 1, 2016 which earns 6.25% compounded quarterly. How...

Rahul deposits \$5000.00 in an account on April 1, 2016 which earns 6.25% compounded quarterly. How much is in the account on September 15, 2021 if simple interest is allowed for part of a conversion period?

Amount deposited on Apr1, 2016.

No. of periods till mar 31,2021 = 20 Periods [ 5 * 4 ]

Apr to June = 1 Period

July 1st to September 15 = 2 Months 15 days

Amount after 30 June,2021 :

FV = PV( 1 + r)^n

Where r is Int rate per period
n - No. of periods

 Particulars Amount Present Value \$      5,000.00 Int Rate 1.563% Periods 21
 Future Value = Present Value * ( 1 + r )^n = \$ 5000 ( 1 + 0.0156) ^ 21 = \$ 5000 ( 1.0156 ^ 21) = \$ 5000 * 1.3848 = \$ 6924.22

Amount on June 30 , 2021 = \$ 6924.22

Int for Balance 2 Months 15 Days = PTR

= 6924.22 *( 2.5 / 12 )* 6.25%

= \$ 90.16

Amount on Sep 15 , 2021 = \$ 6924.22 + \$ 90.16

= \$ 7014.38

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