Question

calculate compound interest on thousand rupees over period of one year at 10% per annum if the interest is compounded quarterly

Answer 1

principal= p = 1000

interest per annum = i = 10%

compounded quarterly so 10%/4 = (10/100)/4 = 10/400 = 0.025

time = n = 1 year

no.of quarters in a year = 4

compound interest = P{(1+i)^n -1}

= 1000{(1+0.025)^4 -1}

=1000{(1.025)^4 -1}

=1000 {(1.10381289062 - 1)}

= 1000{0.10381289062}

= 103.81