Question

Calculate the compound interest of 1000 over the period of 1 years at 10% per annum if interest of compounded quarterly

Answer 1

Given, principal, P = Rs. 1000

Compound rate, R = 20% per annum = 20/2 = 10% half-yearly

Time = 18 month = 3 half-years

Amount,

A = {P*[1+ (R/100)]n }

= {1000*[1+(10/100)]3}

= {(1000*11*11*11/10*10*10)}

A = Rs. 1331

Hence, compound interest = Rs. 331.