Multiple compound amount

2. 
Multiple Compound
If interest is paid more than one time a year, then the formula
of compound amount becomes as
A = p
1 + i 
mt

 m 
where;
P = principal or present value
i = rate of interest per year
t = number of years
m = numbers of times in a year when the interest is
compounded.
Example-11
Find compound amount of Rs.6500 in 04 years at 6%
compounded semi-annualy.
Solution:
p = 6500
i=6% =
6
= 0.06
100
t = 4 years
m = 2 (semi-annualy)
we know that
i
A=p(1+ )mt =6500(1+ 0.06
)24
m 2
A = 6500(1 + 0.03)
8
= Rs.8234.006

3. Example-12
Find compound amount of Rs.6500 in 04 years at 6%
compounded quarterly.
Solution:
p = 6500
i=6% =
6
= 0.06
100
t = 4 years
m = 4 (quarterly)
we know that
i
A=p(1+ )
m
A = 6500(1 +
0.06
)44
2
A = 6500(1 + 0.015)16
= Rs.8248.41
Example -13
Find compound amount of Rs.6500 in 04 years at 6%
compounded monthly.
Solution:
p = 6500
i=6%=
6
= 0.06
100
t=4years
m = 12
we kn1ow that
i
A=p(1+ )mt = 6500(1+ 0.06
)4
m 12
A = 6500(1 + 0.005)48
= Rs.8258.18
m t

4. A = 8248.41
i=6% =
t = 4
m = 4
6
100
= 0.06
p=?
we know that
A=p(1+
i
)m  t
m
p =
A
i
)mt
m
=
(1+
8248.41
(1+
0.06
)44
4
p=
8248.41
(1+0.015)16
1.268986
=
8248.41
=Rs.6500
Example-14
Find the present value of Rs.8248.41 due at the end of 04
years if 6% is compounded quarterly.
Solution: