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2 answers:
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Solution :
Given :
Principal amount deposited, P = $ 6000
Rate of interest, r = 5%
Number of years, t = 4 years
When the deposited amount is compounded semiannually, i.e. n = 2
Therefore,
Future value,
= 6000 x 1.2184
= 7310.4
Therefore, after 4 years there will be $ 7310.4 in the amount when compounded semi annually.
When the deposited amount is compounded quarterly, i.e. n = 4
Therefore,
Future value,
= 6000 x 1.219889
= 7319.334
Therefore, after 4 years there will be $ 7319.334 in the amount when compounded quarterly.
When the deposited amount is compounded monthly, i.e. n = 12
Therefore,
Future value,
= 6000 x 1.22089
= 7325.34
Therefore, after 4 years there will be $ 7325.34 in the amount when compounded monthly.