Question

Find the compound interest on 1000 for 6 months at 20% annum compounded quarterly

Answer 1

The compound interest is 102.50

Step-by-step explanation:

Given, Principal = P = Rs. 1000

Time = T = 6 months = $\frac{6}{12}$ years = $\frac{1}{2}$ year

Rate of interest = R = 20 % = $\frac{20}{100}$ = 0.2

N = Number of compounding periods per year = 4 (compounded quarterly)

A = Amount after T years

Compound Interest = C.I = A - P

Now, $A = P( 1 + \frac{R}{N})^{NT}$

$A = 1000(1 + \frac{0.2}{4})^{(4\times \frac{1}{2}}) \\=> A = 1000(1 +\frac{0.2}{4})^{2}$

=> A = Rs. 1102.50

C.I = A - P = Rs. 1102.50 - Rs. 1000 = Rs. 102.50

Hence, the compound interest is 102.50

Answer 2

Answer:

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