Rekha deposited Rs 16000 in a foreign bank which pays interest at the rate of 20% per annum compounded quarterly, find the interest received by Rekha after one year.

Explanation

Principal `(P)=Rs.16000`
Rate `(R)=20%` p.a or `5%` quarterly.
Period `(n)=1` year or `4` quarters
Amount `(A)=P(1+R/100)^n`
`=Rs.16000(1+5/100)^4`
`=Rs.16000(21/20)^4`
`=Rs.16000xx21/20xx21/20xx21/20`
`=Rs.194481/10`
`=Rs.19448.10`
`∴C.I.=A-P`
`= Rs.19448.10-Rs.16000`
`= Rs.3448.1`
`:.` The interest received by Rekha is `Rs.3448.1`.