05-11-2010, 06:10 AM
Suppose you have a choice between two accounts, Account A and Account B. Account A provides 5% interest, compounded annually and Account B provides 5.25% simple interest. Consider a deposit of Rs.10, 000 in both accounts.
[COLOR="black"]Requirement:
Solution:
Please donot copy as it is, just change a bit and submit.
1. Account "A" provides highest balance at the end of five years i.e. Rs. 12762.82.
2. Amount of interest on interest is Rs. 262.82 (12762.82-10000-2500)
[COLOR="black"]Requirement:
- Which account provides a highest balance at the end of five years?
- What is the amount of interest on interest?
NOTE: You are not required to show the calculations in answer. Be specific and to the point. Only provide one line answer to each question
Solution:
Please donot copy as it is, just change a bit and submit.
1. Account "A" provides highest balance at the end of five years i.e. Rs. 12762.82.
2. Amount of interest on interest is Rs. 262.82 (12762.82-10000-2500)