SOLUTION: Peter deposits k450 000.00 with BSP which offers 4 1/2% per annum interest. Calculate the interest earned after 4 years if it is compounded every three months
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Question 1025531: Peter deposits k450 000.00 with BSP which offers 4 1/2% per annum interest. Calculate the interest earned after 4 years if it is compounded every three months
Answer by robertb(5830) (Show Source): You can put this solution on YOUR website!
The amount, or future value of the deposit is given by the formula
.
In this case, P = 450,000, r = 4.5% = 0.045, n = 4 (quarterly!), and t = 4.
==> .
==>Interest earned is K538,206.66 - K450,000 = K88,206.66
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