Question
Calculate the compound interest earned by depositing Rs.
8,000 at an annual interest rate of 40%, compounded quarterly, for 9 months.Solution
ATQ,
Effective rate of interest = 40 ÷ 4 = 10% Effective number of compounding periods = 4 × (9 ÷ 12) = 3 terms 
Amount after interest = 8,000 × (1.10)³ = 8,000 × 1.331 = 10,648 Compound Interest = 10,648 – 8,000 = Rs. 2,648
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