Normally, you have an interest rate, r, over some specified period (typically a month, quarter or year) and an amount Y that is invested (or loaned) for n periods. Then the total value, V, of the investment is: V = Y*(1 + r/100)^n It is possible to chop up the total time interval into smaller intervals and adjust the interest rate correspondingly so that the total percentage change over a year remains the same. The above equation then takes the form V = Y*e^ax The statement in the question simply means that, instead of calculating the interest using the first formula, it is calculated using the second. The interest is then paid out every three months and so every three months the capital returns to the value Y.
a quarter of a year
The latter of the two would be your better option, assuming the interest is properly compounded. Consider. In the first case, your resulting payment would be: P * 1.053 = P * 1.157625, or a total gain of just over 15.76% In the second case, your resulting payment would be: P * 1.0256 = P * 1 .159693418212890625, for a total gain of just over 15.96%
The difference between 2 years and 3 years is another addition of the interest. 7396 × (1 + rate/100) = 7950.7 → rate = (7950.7/7396 - 1) × 100 = 7.5 % compounded per year.
13310
It means that the interest is paid out every three months (quarter year). That means that the interest paid out after 3 months is earning interest for the remaining nine months. The quarterly interest rate is such that this compounding is taken into account for the "headline" annual rate. As a result, if the quarterly interest is taken out, then the total interest earned in a year will be slightly less than the quoted annual rate.
$194.25 if interest is compounded annually. A little more if compounded quarterly, monthly, or daily.
$156.08
If a sum of money was invested 36 months ago at 8% annual compounded monthly,and it amounts to $2,000 today, thenP x ( 1 + [ 2/3% ] )36 = 2,000P = 2,000 / ( 1 + [ 2/3% ] )36 = 1,574.51
It depends on how often the interest is compounded(annually, monthly...) and also the interest rate of the bank also has an effect on the outcome.
39,337.20
800 x (1.04)6 ie Rs1012.26
Normally, you have an interest rate, r, over some specified period (typically a month, quarter or year) and an amount Y that is invested (or loaned) for n periods. Then the total value, V, of the investment is: V = Y*(1 + r/100)^n It is possible to chop up the total time interval into smaller intervals and adjust the interest rate correspondingly so that the total percentage change over a year remains the same. The above equation then takes the form V = Y*e^ax The statement in the question simply means that, instead of calculating the interest using the first formula, it is calculated using the second. The interest is then paid out every three months and so every three months the capital returns to the value Y.
Quarterly
Quarterly.
Every three months
Every three months is called a quarter. And there are four quarters in a year.