Question

Find the compound interest on Rs. 8000 for 9 months at $20\%$ per annum compounded quarterly.

Answer 1

Principal (P) = Rs.8000
Rate (R) $=20\%$ p.a or $5\%$ p.a quarterly
Period (T) = 9 months or 3 quarters
Interest for the first quarterly
$=\frac{8000\times 5\times 1}{100}=Rs.400$

[$\because$ Simple interest = $\frac{P\times T\times R\times }{100}$
Amount after first quarter = Rs. 8000 + Rs. 400 = Rs. 8400
Or principal for the second year = Rs. 8400
$\therefore$ Interest for the second quarter
$=\frac{8400\times 5\times 1}{100}=Rs.420$
$\therefore$ Amount after second quarter = Rs. 8400 + Rs. 420 = Rs. 8820
Or principal for the third quarter = Rs. 8820
$\therefore$ Interest for the third quarter
$=\frac{8820\times 5\times 1}{100}=Rs.441$
$\therefore$ Compound interest for 9 months or 3 quarters = Rs. 400 + Rs. 420 + Rs. 441 = Rs. 1261