This text discusses the calculation of maturity value for a monthly deposit with quarterly compounding. The effective rate of interest is calculated first, and then the maturity value is calculated using the Future Value Annuity formula.
Questions
- What is the effective rate of interest for a 9% p.a. compounded quarterly investment?
- What is the maturity value of a monthly deposit of Rs. 5 per month for 12 months with a 9% p.a. compounded quarterly interest rate?
Answers
- The effective rate of interest is 0.0931, or 9.31%.
- The maturity value is Rs. 62.50.