Question

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

Answer 1

Given: 
P = Rs 16, 000
R = 20 % p. a.
n = 1 year
We know that: 
\[A = P \left( 1 + \frac{R}{100} \right)^n \]
When compounded quarterly, we have: 
\[A = P \left( 1 + \frac{R}{400} \right)^{4n} \]
 = Rs \[16, 000 \left( 1 + \frac{20}{400} \right)^4 \]
 = Rs \[16, 000 \left( 1 . 05 \right)^4 \]
 = Rs 19, 448 . 10
Also, 
CI = A - P
= Rs 19, 448 . 1 - Rs 16, 000
= Rs 3, 448 . 10
Thus, the interest received by Rekha after one year is Rs 3, 448.10.