Question

Compound interest formula quarterly example

Answer 1

hi friend

One very important exponential equation is the compound-interest formula: ... If interest is compounded yearly, then n = 1; if semi-annually, then n = 2; quarterly, then n = 4; monthly, then n = 12; weekly, then n = 52; daily, then n = 365; and so forth, regardless of the number of years involved.

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Answer 2

Here the format of compound interest when 'compounded quarterly'

★ FORMAT :----

==============

GIVEN :

• Principal = RS. _______
• Rate of interest = ____% Per annum
• Time = ________

TO FIND :

• Compound interest = ?

STEP - BY - STEP EXPLANATION :

→ Principal = P

→ Rate of interest = R% P . A = R/4% Per quaterly

→ Time (n) = 4n quarter years.

Then,

$= > a = p \times \frac{1 + \frac{r}{4} }{100}^{4n}$

$= > p \times \frac{1 + \frac{r}{4} }{100}^{4n}$

and C. I = A - P

Example :-----

★ calculate the compound interest on RS. 24,000 for six month if the interest is payable quarterly at the rate of 8% Per annum.

GIVEN :

• Principal = Rs.24,000
• Rate of interest = 8% P.A. = 2% per quarter
• Time ( period ) = 6 months = 2 Per quarters

TO FIND :

• Compound intrest = ?

STEP - BY - STEP EXPLANATION :

→ principal = Rs. 24,000

→ rate of interest = 8% P.A = 2% per quarter

→ Time (period) = 6 months = 2 quarters

$= > a = p \: ( 1 + \frac{r}{100} ) ^{n}$

$= > 24000(1 \ + \frac{2}{100} ) ^{2}$

$= > 24000 \times \frac{51}{50} \times \frac{51}{50}$

=> Rs. 24,969.60

Compound interest = ( Amount - principal )

Compound intrest =

Rs. (24,969.60 - 24,000) = Rs. 969.60

Therefore, the compound interest = Rs. 969.60