Wikipedia:Reference desk/Archives/Mathematics/2020 December 15
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December 15
editStuck with compound interest problem.
editManjari deposited Rs 8701 in PNB which offers a compound Interest of 12.5% compounded annually. If she kept her money in the bank for 3 years what interest she will get?
I am confused with question wheather they want the effective three year rate and not the effective annual rate. Rizosome (talk) 06:34, 15 December 2020 (UTC)
- It sounds to me like they do not want a rate as a percentage, but an absolute amount in rupees. So, if after three years her bank account shows Rs 12345, say, the accrued interest would be Rs 12345 − Rs 8701 = Rs 3644. (The number 12345 is made up for the purpose of illustration.) I am not certain whether the absolute amount is the answer they want to hear; the question is not entirely clear. --Lambiam 11:18, 15 December 2020 (UTC)
- Yes, it's a language issue. When we say "a compound Interest of 12.5% compounded annually", we're referring to an interest rate. The second sentence is referring to the actual amount of money she will accrue over 3 years. The framer of the question ought to have had ESL students in mind when framing their question. -- Jack of Oz [pleasantries] 03:09, 16 December 2020 (UTC)
- Looks like a homework, doesn't it...? --CiaPan (talk) 09:09, 16 December 2020 (UTC)
- The OP did not ask us to do their homework, but to elucidate the meaning of the problem. As the template {{Dyoh}} says, "If you need help grasping the concept of a problem, by all means let us know." --Lambiam 10:30, 16 December 2020 (UTC)
How did you get Rs 12345? Rizosome (talk) 15:47, 16 December 2020 (UTC)
- Quote: "(The number 12345 is made up for the purpose of illustration.)" -- Jack of Oz [pleasantries] 21:05, 16 December 2020 (UTC)