Question

Calculate the amount and compound interest for Rs. 500 for 1 year at 2% p.a. compounded quarterly.

Answer 1

Here $P=500$ Rs.,

$n=4$ (because Compounded quarterly) and $R=\frac{2}{4}$(Compounded quarterly)

Amount$\left(A\right)=P{(1+\frac{R}{100})}^n$

$=500{(1+\frac{2}{4\times 100})}^4$

$=500{\left(\frac{201}{200}\right)}^4$

$=500(1.005{)}^4$

$=510.07$ Rs.

Compound interest$(C.I)=A-P=510.07-500=10.07Rs.$

Hence, the compound interest is $10.07Rs.$.