SOLUTION: find the compound interest on Rs.16000 for one year at 20 percent per annum, the interest being compounded quarterly.

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Question 1100262: find the compound interest on Rs.16000 for one year at 20 percent per annum, the interest being compounded quarterly.
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
annual interest rate = 20% / 100 = .2

number of compounding period per year is 4.

.2 / 4 = .05 interest rate per quarter.

16000 * 1.05 ^ 4 = 19448.1

general formula is f = p * (1 + r) ^ n

f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.

ij your problem the time period is quarters of a year.

the yearly interest rate is divided by 4 to get the quarterly interest rate.
the number of years is multiplied by 4 to get the number of quarters.