Calculate compound interest on ` 1000 over a period of 1 year at 10% per annum, if interest is compounded quarterly with easy explanation
Answers
Answered by
183
To calculate compound interest,
First use the following formula to calculate the amount
Then subtract principal from amount to get the compound interest.
Here,
P = 1000
rate, r = 10%
time, t = 1 year
it is compounded quarterly,
thus n = 1 ÷ 0.25 = 4
Amount = ₹1103.8
Compound Interest = 1103.8 - 1000 = ₹103.8
First use the following formula to calculate the amount
Then subtract principal from amount to get the compound interest.
Here,
P = 1000
rate, r = 10%
time, t = 1 year
it is compounded quarterly,
thus n = 1 ÷ 0.25 = 4
Amount = ₹1103.8
Compound Interest = 1103.8 - 1000 = ₹103.8
Answered by
104
One year = 4 quarters
A=1000(1+(10/4)/100)^4
=1000(1+5/2*1/100)^4
=1000(1+1/40)^4
=1000(41/40)^4
=1000*2825761m/2560000
1*2825761/2560=1103.81
Ci=a:-P=1103.81-1000
=103.81 rupees.
Similar questions