An individual has purchased Rs.275,000 worth of Savings Certificate. The Certificate expires in 25 years and a simple interest rate is computed quarterly at a rate of 3 percent per quarter. Interest cheques are mailed to Certificate holders every 3 months. The interest the individuals can expect to earn every three months is:
Well, let's do some calculations with humor, shall we?
So, 3 percent per quarter? That's not bad! It's like getting a small interest party every few months.
Okay, so first, we need to figure out the interest for each quarter. Since the rate is 3 percent, we can convert it to a decimal by dividing it by 100. That gives us 0.03.
Next, we need to calculate the interest for the quarter. To do that, we multiply the principal amount (Rs.275,000) by the interest rate (0.03).
So, 275,000 * 0.03 gives us Rs.8,250.
Now, since the interest is paid every 3 months, the individual can expect to earn Rs.8,250 every quarter. That's like getting a funny little bonus every few months!
But remember, this calculation assumes that the principal amount remains the same throughout the 25-year period and does not take into account any compounding. So, it's just a rough estimate of the interest earned.
Hope that answer was worth a chuckle!
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To calculate the interest earned every three months, we can use the formula for simple interest:
Simple Interest = Principal Amount * Interest Rate * Time Period
Given:
Principal Amount (P) = Rs. 275,000
Interest Rate (r) = 3% per quarter = 0.03
Time Period (t) = 3 months
Plugging in these values into the formula:
Interest = Rs. 275,000 * 0.03 * (3/12)
Simplifying the equation:
Interest = Rs. 275,000 * 0.03 * 0.25
Interest = Rs. 2062.50
Therefore, the individual can expect to earn Rs. 2,062.50 in interest every three months.
To calculate the interest the individual can expect to earn every three months, we need to use the formula for simple interest:
Interest = Principal (P) x Rate (R) x Time (T)
In this case, the principal (P) is Rs.275,000 and the rate (R) is 3 percent per quarter. The time period (T) is 3 months.
First, we need to convert the annual interest rate to a quarterly rate. Since there are 4 quarters in a year, the quarterly rate would be 3 percent divided by 4, which is 0.75 percent.
Next, we need to convert the time period from months to quarters. Since there are 3 months in a quarter, the time period would be 3 months divided by 3, which is 1 quarter.
Now, we can plug these values into the formula:
Interest = Rs.275,000 x 0.75 percent x 1 quarter
Calculating the expression, we get:
Interest = Rs.275,000 x 0.0075
Interest = Rs.2,062.50
Therefore, the individual can expect to earn Rs.2,062.50 in interest every three months.