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    Question

    What will be the amount after 2 years on a Principal “P” if compounding is done on a quarterly basis?

    A P*(1+r/4)4 Correct Answer Incorrect Answer
    B P*(1+r/4)8 Correct Answer Incorrect Answer
    C P*(1+r/4)2 Correct Answer Incorrect Answer
    D P/4*(1+r)8 Correct Answer Incorrect Answer
    E P/4 *(1+r/4)2 Correct Answer Incorrect Answer

    Solution

    If the compounding is done more than once in a year, then A = P*(1+ )m*t Where, ·       m = no. of periods in a year when compounding is being done ·       R = rate of interest p.a ·       t = time in years

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