Question

What interest will produce a capital of $ 149,000 invested at 13% compounded every 23 days,
in 3 years?

Use the A. Calendar year B. Business year.

Answer 1

In calendar year there is 360 days .

In bussiness year there is 252 days

Here interest is compounded every 23 days

So no of periods in year is 360/23 = 15.65

No of periods in business year is = 252/(23) = 10.96

Capital is 149000

Invested for 3 years

Rate is 13%

Compound interest formula is A=p(1+r/n)^nt

Where r is rate of interest

N is no of times componding in year

And t is no of years

Amount for 3 calendar years is

= 149000(1+0.13/15.65)^15.65×3 = 219715.91

Amount for business year

= 149000(1+0.13/10.96)^10.96×3 = 219565