Question

Find the compound intereston rupees 15625 at 16 percent per annum for nine months when compounded quaterly

Answer 1

Principal= Rs. 15625

Rate= 16%

Time= 9 months i.e. 9/12 yrs

If it is compounded quarterly then,

Rate= 16/4

= 4%

Time= 9/12 yrs ×4

= 9/12×4

= 3 yrs

Therefore, conversion period (n)= 3

According to the formula,

A=P×(1+R/100)n

A=15625×(1+4/100)3

A=15625×(104/100)3

A=15625×(26/25)×(26/25)×(26/25)

A=17576

C.I.=A-(original) P

C.I.=17576-15625

C.I.= 1951 (Ans.)