# Find Out the Amount, Interest is Compounded Quarterly? If

The Amount on rs.2560 in 6 months at 25% per annum, if the interest is compounded quarterly, is;

- Rs.2,890
- Rs.2,790
- Rs.2,870
- None of these

**Answer: (1) Rs.2890**

**Explanation:-**

**Given**–

Amount = Rs. 2560, Time = 6 months = 6/3 = 2 quarters (1 quarter = 3 months)

Rate of interest = 25 % p. a. = 25/4 % per quarter

**Formula-**

**Compound Interest = P [(1 + R/100) ^{t} – 1]**

**Where, P = principal, R = rate, t = time.**

Then, Amount = 2560 ( 1 + 25/4 x 100)^ 2

= 2560 ( 1 + 1/16)^2

= 2560 (17/16)^2

= 2560 x 17 x 17 /16 x 16

= Rs. 2890

Then, the amount is Rs.2890.

Hence, the answer is (1) Rs.2890.

**Answer : Rs 2890**

Amount = Rs. 2560

Time = 6 months = 2 quarters

interest rate = 25 % pa = 25/4 per quarter

compounded quarterly

Interest for 1 quarter = (2560*1*25/4)/100 = 160

Amount for next quarter = 2560+160 = 2720

Interest for 2nd quarter = (2720*1*25/4)/100 = 170

Amount after 2 quarters (6 months) = 2720+170 =**2890**