$10,000 is deposited into a savings account that earns 3% per annum compounded quarterly.
(a) How much interest will be credited in the second month?
(b) How much interest will be credited in the second year?
Given pirncipal amount $10,000 and interest rate 3%
compounded 4 times per year
a) interest credited in the second month
compounded interest formula
A=P(1+
)nt
A=AMOUNT
P=PRINCIPAL p=$ 10,000
r=rate of interest r=3%
n=no of times compounding per annum n=4
t=time
=
=10050.04
THEREFORE INTEREST = 10000-10050.04=50.04
INTEREST =50.04
B)INTEREST CREDIT IN THE SEOCND YEAR
compounding for annum 4 times n =4
t=2
=10000*1.0616
=10,615.6
therefore interest =10615.6-10000=615.6
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