Question

Auri will need 2000 after two years to buy a new computer. She is taking a quarterly savings scheme in her local bank after offering 6% in return. How much does she need to save every quarter?

Answer 1

To calculate the amount Auri needs to save every quarter, we can use the formula for compound interest. By substituting the values into the formula and solving for P, we can find how much Auri needs to save every quarter.

To calculate the amount Auri needs to save every quarter, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

• A is the amount Auri needs after 2 years, which is $2000
• P is the amount she needs to save every quarter
• r is the annual interest rate as a decimal, which is 6%
• n is the number of times interest is compounded per year, which is 4 (quarterly)
• t is the number of years, which is 2

By substituting the values into the formula and solving for P, we can find how much Auri needs to save every quarter.