interest

This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
June 24, 2016 at 12:52 pm #323994
adarsh1997
Participant
- Topics: 646
- Replies: 282
Dear sir,
I am having some difficulties in the BPP revision kit.

-If a sum of $12,000 is invested at 8% per annum with compound interest quarterly, what is the amount to which the principal will have grown by the end of year 3?

The answer is C $15,219.

-A bank offers depositors a nominal 4% pa, with interest payable quarterly. What is the annual rate of interest?

The anwer is D 4.06%.
June 25, 2016 at 10:24 am #324042
John Moffat
Keymaster
- Topics: 57
- Replies: 54857
1. Add on 2% a quarter for a total of 3 x 4 quarters. So multiply by 1.02^12

2. It is 1% per quarter, so over a year the interest is 1.01^4 – 1
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.