Question

# Find the compound interest on Rs. 64000 for 1 year at the rate of 10% per annum compounded quarterly.

Solution

## Principal (P) = Rs. 64000 Rate (R) =10% p.a or 52% quarterly Period (T) = 1 year = 4 quarters ∴ Interest for the first quarter =PRT100 =Rs.64000×5×1100×2=Rs.1600 ∴ Amount after first quarter = Rs. 64000 + Rs. 1600 = Rs. 65600 Or principal for the second quarter = Rs. 65600 Interest for the second quarter =Rs.65600×5×1100×2=Rs.1640 Amount after second quarter = Rs. 65600 + Rs. 1640 = Rs. 67240 Or principal for the third year = Rs. 67240 Interest for the third quarter =67240×5×1100×2 = Rs. 1681 Amount after third quarter = Rs. 67240 + Rs. 1681 = Rs. 68921 Or principal for the fourth quarter =Rs.68921×5×1100×2=Rs.1723.025 Total compound interest for 4 quarters or one year = Rs. 1600 + Rs. 1640 + Rs. 1681 + Rs. 1723.025 = Rs. 6644.025

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