Question

Rekha deposited Rs. 16000 in a foreign bank which pays interest at the rate of 20% per annum compounded wuarterly, find the interest received by Rekha after one year

Answer 1

Given, 

Principal = Rs. 16000 

Rate = 20% per annum \(=\frac{20}{4}\) = 5% quarterly

Time = 1 year = 4 quarters 

Hence, 

Compound interest \(={P}[({1}+\frac{R}{100})^T-{1}]\)

\(={16000}[({1}+\frac{5}{100})^4-{1}]\)

\(={16000}[(\frac{21}{20})^4-{1}]\)

\(={16000}\times\frac{34481}{160000}\) = Rs. 3448.10

So, 

Interest received by Rekha after one year = Rs.3448.10