Question

15. Calculate compound interest on 1000 over a period of 1 year at 10% per annum,if
interest is compounded quarterly?

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Answer 1

Answer:

Given:  P=1000,R=10% per annum =410% per quarter  (1 year is 4 quarters) =2.5

T=1 year=4 quarters

CI=P(1+100R)T−P

=1000(1+1002.5)4−1000

CI=1103.8−1000=103.8

∴ interest over 4 quarters will be Rs.103.8