Question

Find compound interest on Rs. $3000$ for two year at $8\%$ per annum compounded quarterly.

• A. $524.98$
• B. $534.98$
• C. $544.98$
• D. $514.98$

Answer 1

Answer: (D)

$514.98$

We know the formula,
$A=P{(1+\frac{r}{n})}^{n.t}$
Where,
$A=$ total amount
$P=$ principal or amount of money deposited,
$r=$ annual interest rate
$n=$ number of times compounded per year
$t=$ time in years
Given:
$P=$ Rs. $3000,r=8\%,n=4$ and $t=2$ years
$A=3000{(1+\frac{0.08}{4})}^{4\times 2}$
$A=3000\times {1.02}^8$
$A=3000\times 1.171659$
$A=$ Rs. $3514.98$
To find interest we use formula $A=P+I$, since $A=3514.98$ and $P=3000$, we have:
$A=P+I$
$\Rightarrow 3514.98=3000+I$
$\Rightarrow I=3514.98-3000=514.98$
Interest, $I=$ Rs. $514.98$