Find the amount and the compound interest on ₹ 100000.

Find the amount and the compound interest on ₹ 100000 compounded quarterly for 9 months at the rate of 4% p.a.

Solution:

It is given that
Principal (P) = ₹ 100000
Rate of interest = 4% p.a. or 1% quarterly
Period (n) = 9 months or 3 quarters
We know that
A = P (1 + r/100)n
Substituting the values
= 100000 (1 + 1/100)3
By further calculation
= 100000 × 101/100 × 101/100 × 101/100
= ₹ 103030.10
Here
CI = A – P
Substituting the values
= 103030.10 – 100000
= ₹ 3030.10

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