Question

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

Answer 1

$GIVEN:$

• Principle (P) = 1000 Rs.

• Rate (R) =10% per annum ⇒ (10/4)% per quarter year ⇒ 2.5% per quarter year.

• Time = 1/4th of a year ( We are calculation the interest quarterly). i.e., 4 quarters of a year.

$\bigstar SOLUTION:$

We know this formula:

$I = P[(1+\frac{R}{100} )^T - 1]$

Here, substitute the values of P = 1000, R=2.5%, Time = 4 quarters.

$I = 1000[(1+\frac{2.5}{100} )^4-1]$

$I = 1000[(1.025)^4-1]$

$I=1000\times 1.025\times 1.025\times 1.025\times 1.025 - 1$

$I = 1103.8-1000=103.8$

INTEREST  - 103.8 Rs.

$HOPE \:\: THIS \:\: HELPS \:\: :D$