Quiz

1. Find the compound amount and compound interest on the principal 20,000 borrowed at
6% compounded annually for 3 years.

2. Find the compound amount which would be obtained from the interest of 2000 at 6%
compounded quarterly for 5 years.

3. Find compound interest on 2500 invested at 6% per annually, compound semi-annually

for 8 years.

4. Find the Compound interest of 525 invested at 10% compound quarterly for 4 years.

5. Find the compound amount which would be obtained from the interest of 15000 at 5%
compounded quarterly for 5 years.

Answer keys
1.
Solution:
P= 20000,
i= 6% =.06
n=3
m=1
using formula F=P (1+i)n
=20000(1+.06)3=23820.32

The compound interest (I=F-P) 23820.32–20000=3820.32

2.
Solution:
P = 2000,
i=6%=r/m= 6/4= 1.5= 0.015
n=5×4=20
m=4
F=P(1+i)n=2000(1+.015)20=2693.71

3.
Solution:
P = 2500,
i=6%=r/m = 6/2 =3 = 0.03
n=8×2=16
m=2
F=P(1+i)n =2500(1+.03)16=4011.73

The compound interest =4011.73–2500=1511.73

4.
Solution:
P=525
i=10% =r/m = 10/4=2.4 = 0.024
n=4 t x m= 4x4=16
m=4
F=P(1+i)n =525(1+0.024)16 = 767.29
The compound interest = 767.29–525=242.29

5.

Solution:

P=15000
i=5%= r/m = 5/4=1.25= 0.0125
n=5x4= 20
m=4

F=P(1+i)n =15000(1+0.0125)20 =19230.56