Question

Find the amount on a deposit of Rs. $2100$, earning $4\%$ interest compounded quarterly for $2$ years.

Answer 1

For calculating the interest quarterly, we must divide the interest rate by the number of interest periods.
The interest rate $r$, compounded quarterly is $\frac{0.04}{4}=0.01$.
The number of payment periods $t$ is $2$ years $\times 4$ interest periods $=8$.
We know the formula, Amount, $A=P(1+r{)}^t$
$A=2100(1+0.01{)}^8$
$A=2100\times 1.082$
$A=$ Rs. $2272.20$