What is the compound interest on a sum of ₹8000 at the rate of 5% per annum compounded quarterly for 3 months?
principal amount = ₹8000
rate = 5% per annum
time = 3 months
Here the rate of interest is given 5% per annum. But we need to get the rate of interest for 3 months(quarterly). For that, we need to divide 5% by 4. So the rate of interest for 3 months = $$\frac{5}{4}\%$$
compound interest = $$8000\times\ \frac{5\%}{4}$$
= $$8000\times\frac{5}{400}$$
= $$20\times5$$
= ₹100
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