a) The total interest that Arsh earns for 2 years is $5,400.
b) His monthly deposit is $600.
c) The rate of interest is 31.929% compounding monthly.
We can determine the above using a combination of manual and online finance calculators.
Total amount deposited by Arsh in 2 years = $14,400
The number of months in 2 years = 24 months (2 x 12)
a) Interest earned = 3/8 of $14,400 = $5,400
b) Monthly deposit = $600 ($14,400 ÷ 24)
Total future value = $19,800 ($14,400 + $5,400)
N (# of periods) = 24 months (2 years x 12)
PV (Present Value) = $0
PMT (Periodic Payment) = $600
FV (Future Value) = $19,800
Results:
I/Y = 31.929% if interest compound 12 times per year (APR)
I/Y = 37.042% if interest compound once per year (APY)
I/period = 2.661% interest per period
The sum of all periodic payments = $14,400.00
Total Interest = $5,400.00