Math Problem Statement

My capital is Rs. 4,92,48,664. If I earn 10% interest every month, what will be my capital after 1 year if I compound every month

Solution

To find your capital after 1 year with a 10% monthly interest rate compounded monthly, we can use the compound interest formula:

A=P×(1+rn)n×tA = P \times \left(1 + \frac{r}{n}\right)^{n \times t}

Where:

  • AA is the amount after time tt.
  • PP is the initial principal (Rs. 4,92,48,664).
  • rr is the annual interest rate (in decimal form).
  • nn is the number of times interest is compounded per year.
  • tt is the time in years.

For this problem:

  • P=4,92,48,664P = 4,92,48,664
  • Monthly interest rate is 10%, so r=0.10×12=1.2r = 0.10 \times 12 = 1.2 annually.
  • n=12n = 12 (compounded monthly).
  • t=1t = 1 year.

Now, let's calculate the final amount AA.After 1 year, with a 10% monthly interest rate compounded monthly, your capital will be approximately Rs. 15,45,63,405.

Would you like more details or have any questions about this calculation?

Here are some related questions:

  1. What would your capital be after 6 months with the same interest rate?
  2. How would the capital change if the interest rate were compounded quarterly instead?
  3. What is the difference in total interest earned between compounding monthly and compounding annually?
  4. How much interest would you earn in a year without compounding (simple interest)?
  5. What would be the total amount after 2 years with the same conditions?

Tip: Compounding more frequently generally results in higher returns due to interest on interest being calculated more often.

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Exponential Growth

Formulas

Compound Interest Formula

Theorems

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Suitable Grade Level

Grades 9-12