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:

$A=P\left (1+\dfrac{r}{n}\right)^{nt}$

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

$A=2000\left (1+\dfrac{0.2}{4}\right)^{4(1)}$

$A=2000\left (1.05\right)^{4}$

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

$A=2431.0125$

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.