Question

Find the compound interest on 5,000 at the rate of 8% per annum for 1 year when the interest is compounded quarterly.

Answer 1

Solution!!

The principal, rate of interest and time period is given. The interest is compounded quarterly. We have to calculate the compound interest.

P = Rs 5000

R = 8% p.a.

n = 1 year

We can calculate the amount using a formula and then subtract it from the principal to get the compound interest.

Amount = 

Amount = 

Amount = 

Amount = 

Amount = 5000(1.02)⁴

Amount = Rs 5412.16

CI = Amount - P

CI = Rs 5412.16 - 5000

CI = 412.16

Abbreviations used:-

P → Principal

R → Rate of interest

n → Time period

CI → Compound interest

Answer 2

Answer:

Therefore, the compound interest is Rs. 624.32 on Rs. 5000 if it is compounded half yearly for 1 year 6 months at 8 % per annum.