Compound Interest Quiz

Compound Interest Calculations

• Principal amount of Rs. 10,000 with an annual interest rate of 8%, compounded annually, results in a total amount of Rs. 12,000 after 3 years.
• Calculation used: Total Amount = Principal × (1 + Rate)^Time = 10,000 × (1 + 0.08)^3

Finding Principal Based on Compound Interest

• Compound interest of Rs. 2,000 accrued over 2 years at 10% per annum implies a principal amount of Rs. 8,264.
• Formula used: CI = P [(1 + r)^t - 1], where CI is compound interest, P is principal, r is the rate (0.10), and t is time (2 years).

Fixed Deposit Investment

• An investment of Rs. 5,000 at an annual interest rate of 6%, compounded quarterly results in a total amount of Rs. 5,348.
• Calculation involves: Total Amount = Principal × (1 + Rate/n)^(n×t), where n is the number of compounding periods per year (4 for quarterly), and t is the time in years (1).

Principal Determination from Compound Interest

• Given a compound interest of Rs. 1,440 over 2 years at 12% per annum, the principal amount is Rs. 10,000.
• Calculated via formula: CI = P [(1 + r)^t - 1].

Compound Interest on a Loan

• A loan of Rs. 20,000 taken for 4 years at an interest rate of 8%, compounded semi-annually leads to a compound interest of Rs. 8,128.
• The interest calculation applies the formula: CI = P [(1 + r/n)^(nt) - 1], with n as 2 for semi-annually.