Question

Find the amount and compound interest on Rs.8000 at 16% p.a. for 9 months, when the interest is compounded quarterly​

Answer 1

• formula of compound interest C.I.=P(1+rn)nt−PC.I.=P(1+rn)nt−P, where P is the principal (or original amount), r is the annual rate, n is the number of times interest compounded per time period, t is the number of years on which interest has applied.

Complete step-by-step answer:

We are going to use the formula of compound interest which is written below:

C.I.=P(1+rn)nt−PC.I.=P(1+rn)nt−P

Where P: the Principal (or original amount)

r: annual rate of interest

n: number of times interest compounded per time period

t: number of years on which the interest has applied

It is given that:

The principal (or original amount) is Rs 8000.

Annual rate of interest is 20%.

The interest is compounding quarterly means n = 4.

The interest compounded quarterly for 9 months means t=912t=912year.

Now, substituting these values in the compound interest formula we get,

C.I.=8000(1+20100(4))4×912−8000C.I.=8000(1+(0.25×0.2))3−8000C.I.=8000(1+.05)3−8000C.I.=9261−8000C.I.=1261C.I.=8000(1+20100(4))4×912−8000C.I.=8000(1+(0.25×0.2))3−8000C.I.=8000(1+.05)3−8000C.I.=9261−8000C.I.=1261

So, the compound interest on Rs 8000 at 20% per annum for 9 months compounded quarterly is 1261.