Question

Find the amount and compound interest on 10,000 borrowed for a year at 12% p.a. compounded quarterly.​

Answer 1

Answer:

Payment due = Rs 11255

Compound interest = 1255 Rs

Step-by-step explanation:

Given that sum of money is compounded quarterly. So it will be compounded 4 times at rate of 12/4 = 3 % per quarter = 3/100 = 0.03 percent per quarter.

 

Payment due = P (1+r)^t  

Payment due = 10000 (1 + 0.03)^4  

Payment due = 10000 × 1.03^4  

Payment due = 10000 × 1.1255  

Payment due = Rs 11255

 

Compound interest is given by -  

Compound interest = payment due - sum invested  

Compound interest = 11255 - 10000  

Compound interest = Rs 1255  

Hence, compound interest is 1255 Rs.