Question

Find the compound interest on Rs. 15625 for 9 months at $16\%$ per annum, compounded quarterly.

Answer 1

Principal (P) = Rs. 15625
Rate (R) $=16\%$ p.a or $4\%$ quarterly.
Period (n) = 9 months or 3 quarters.
$\therefore$ Amount (A) $=P{(1+\frac{R}{100})}^n$
$=Rs.15625{(1+\frac{4}{100})}^3=Rs.15625{\left(\frac{26}{25}\right)}^3$
$=Rs.15625\times \frac{26}{25}\times \frac{26}{25}\times \frac{26}{25}=Rs.17576$
$\therefore$ Compound interest = A - P
= Rs. 17576 - Rs. 15625 = Rs. 1951