Wikipedia:Reference desk/Archives/Mathematics/2020 December 15

= December 15 =

Stuck with compound interest problem.
Manjari deposited Rs 8701 in PNB which offers a compound Interest of 12.5% compounded annually. If she kept her money in the bank for 3 years what interest she will get?

I am confused with question wheather they want the effective three year rate and not the effective annual rate. Rizosome (talk) 06:34, 15 December 2020 (UTC)


 * It sounds to me like they do not want a rate as a percentage, but an absolute amount in rupees. So, if after three years her bank account shows Rs 12345, say, the accrued interest would be Rs 12345 − Rs 8701 = Rs 3644. (The number 12345 is made up for the purpose of illustration.) I am not certain whether the absolute amount is the answer they want to hear; the question is not entirely clear. --Lambiam 11:18, 15 December 2020 (UTC)


 * Yes, it's a language issue. When we say "a compound Interest of 12.5% compounded annually", we're referring to an interest rate. The second sentence is referring to the actual amount of money she will accrue over 3 years. The framer of the question ought to have had ESL students in mind when framing their question. --   Jack of Oz   [pleasantries]  03:09, 16 December 2020 (UTC)


 * Looks like a homework, doesn't it...? --CiaPan (talk) 09:09, 16 December 2020 (UTC)
 * The OP did not ask us to do their homework, but to elucidate the meaning of the problem. As the template Dyoh says, "If you need help grasping the concept of a problem, by all means let us know." --Lambiam 10:30, 16 December 2020 (UTC)

How did you get Rs 12345? Rizosome (talk) 15:47, 16 December 2020 (UTC)
 * Quote: "(The number 12345 is made up for the purpose of illustration.)" --  Jack of Oz   [pleasantries]  21:05, 16 December 2020 (UTC)