Question

Find the compound interest on Rs. 2000 for one year at the rate of '20%' per annum. If theinterest compounded quarterly.​

Answer 1

Given:

Principal = Rs. 2000

Rate of interest = 20% p.a. compounded quarterly.

Time = 1 year

To find:

The compound interest.

Solution:

Formula for amount:

`A=P\left (1+(r)/(n)\right)^(nt)`

where,

P = Principal

r = Rate of interest

t= Time

n = number of times interest compounded in an year.

Putting P=2000, r=0.2, n=4 and t=1, we get

`A=2000\left (1+(0.2)/(4)\right)^(4(1))`

`A=2000\left (1.05\right)^(4)`

`A=2000\left (1.21550625\right)`

`A=2431.0125`

Now, the compound interest is

`C.I.=A-P`

`C.I.=2431.0125-2000`

`C.I.=431.0125`

Therefore, the compound interest is Rs 431.0125.