This is another doubt about compound interest.If i suppose invest 10000$on 2.75 interest per annum rate for two years compounded Quarterly in a year then what the interest i receive.and the total amount i receive at the end of two rears.
2007-02-28 00:06:27 · 3 answers · asked by Anonymous in Science & Mathematics ➔ Mathematics
Is the interest nominal or effective?
if it is nominal (as is usually quoted in the US), then you get 1/4 of 2.75% every quarter. The beauty of that is that as it is compounded, so on the second quarter, when you compute the interest, you include in the principal the interest you got paid in the 1st quarter.
Example:
For your 10,000 you would get at the end of the year 10,277.85 instead of 10,275.00.
At the end of 2 yrs it would be 10,563.42
2007-02-28 00:15:07 · answer #1 · answered by MSDC 4 · 0⤊ 1⤋
10000*(1+0.0275/4)^8
=10563.42
2007-02-28 01:40:03 · answer #2 · answered by fcas80 7 · 0⤊ 1⤋
$10,563.42... i think
2007-02-28 00:09:56 · answer #3 · answered by Shakespeare, William 4 · 0⤊ 0⤋