Question

At the end of 1 year on ₹1800 at 8 percent per annum compounded quarterly.

Answer 1

Compound interest accumulation factor :

P × (1 + i)ⁿ

P = 1800

i = 8%/4 = 2% — the interest is compounded semiannually

n = 1 × 4 = 4 — compounded semiannually

Doing substitution :

1800 × (1.02)⁴ = 1800 × 1.08243

= 1948.374

Interest = 1948.374 - 1800 = 148.374