Question

Compute the compound interest on rupees 25000 for 9 month at 4% per annum compounded quarterly

Answer 1

Answer:

Compound interest = Rs.757.53

Step-by-step explanation:

P = initial amount = Rs.25000

R = rate of interest per cent per year = 4

T = time period in number of years = 0.75

m = compounding interval = 4 [no. of quarters per year, in this case]

A = final amount at the end of period T

A = P(1 + (R/m)/100)^(Tm)

Substituting the values we get:

A = 25000 * (1 + (4/4)/100)^(0.75*4)

A = 25000* (1 + 1/100)^(3)

A = 25000*(1.01)^3

A = 25757.53 (approx)

Compound Interest (CI) earned = A - P

=> CI = 25757.53 - 25000

=> CI = 757.53

Compound interest = Rs.757.53