Question

Find the compound interest on Rs.10,000 for 1 year at 20% per annum interest being payable quarterly

Answer 1

Formula for amount when a principal of $P$ compounded at the rate of $r$% per time interval for $n$ time intervals is given by $A=P(1+\frac{r}{100}{)}^n$

Given, Rate of interest = $20$% per annum = $\frac{20}{4}=5\%$ per quarter

Time $=1$ year $=4$ quarters

Principal $=Rs.10000$
Amount at the end of $1$ year $A=10,000(1+\frac{5}{100}{)}^4$
$=10,000\times (1.05{)}^4$
$=10,000\times 1.21550625=12,155.0625$
Compund Interest $=A-P=12,155.025-10,000=2155.0625$