A type of savings given by banks for certain period of time where, customers can get high interst rate for their investment is fixed deposit(FD).
Principal amount is 4000, interest rate is 3%, number of period is 10 months and pay frequency is Annually. Find the fixed deposit interest earned and maturity value.
P = 4000 r = 3/100 = 0.03 t = 10 months n = Annually (1)
Interest Earned (I) Maturity Value (A)
A = P x (1 + r/n)nt A = 4000 x (1 + 0.03/1)1*(10/12) A = 4099.75
I = A - P I = 4099 - 4000 I = 99.75 Interest Earned on FD is 99.75 and maturity value is 4099.75