Question

Lily borrowed Rs. $6000$ for $3$ years at $48\%$ interest compounded quarterly from Chinni. What was the interest paid by Lily to Chinni?

Answer 1

We know the formula,
$A=P{(1+\frac{r}{n})}^{n.t}$
Given:
$P=$ Rs. $6000,r=8\%,n=4$ and $t=3$ years
$\Rightarrow A=6000{(1+\frac{0.08}{4})}^{4.3}$
$\Rightarrow A=6000\times {1.02}^{1}2$
$\Rightarrow A=6000\times 1.268242$
$\Rightarrow A=$ Rs. $7609.45$

Thus, interest paid by Lily to Chinni is $7609.45-6000=$ Rs. $1609.45$.