Doubt in my calculations

Course Name: Python for Trading: Basic, Section No: 3, Unit No: 6, Unit type: Quiz 

According to my calculations the answer is $1051.16 but the system says correct answer is $1050.95. Can you please provide detailed calculations so that i can rectify my mistake

Hi Venkatesh,



Here we can simply use the formula for compounding to arrive at the answer, which is:



Future Value = P * (1 + r/n)^(nt),



where:

P = principal amount

r = annual rate of interest

n = number of periods which is 4 in this case, as we are talking about quarterly coupons

t = time period, which is 1 (year) in this case



Hence, Future Value = $1000
(1 + 0.05/4)^(4*1) = $1050.95.



Hope this helps. Please feel free to reach out in case if any further queries.



Thanks