Mrs. Renu wants to deposit a regular amount at the beginning of each quarter for 3 years. The bank pays interest @ 8% per annum. Find the quarterly deposits if Mrs. Renu will get Rs. 40000 at the end of 3 years.
To find the quarterly deposits required to accumulate Rs. 40000 at the end of 3 years with an interest rate of 8% per annum, we can use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r)^n - 1] / r
Where:
FV is the future value (Rs. 40000),
P is the regular deposit amount,
r is the interest rate per period (quarterly interest rate = 8% / 4 = 0.02),
and n is the number of periods (number of quarters = 3 years * 4 quarters/year = 12 quarters).
Now, let's substitute the given values into the formula and solve for P:
40000 = P * [(1 + 0.02)^12 - 1] / 0.02
To solve for P, we can rearrange the equation:
P = 40000 * 0.02 / [(1 + 0.02)^12 - 1]
Using a calculator, we can now calculate the value of P.