Q.Find the compound interest on ₹10,000 for 1 year at 8% per annum, compounded quarterly.

Convert the annual rate and time into quarterly terms before applying the compound-interest formula.

Periods $= 4 \times 1 = 4$; rate per quarter $= 8/4 = 2\%$. …

Here $P = ₹10{,}000$, $r = 8\%$ per annum, $t = 1$ year, compounded quarterly.

Step 1 — Convert to quarterly terms. Periods $= 4t = 4$. Rate per quarter $= \dfrac{r}{4} = \dfrac{8}{4} = 2\%$.

Step 2 — Apply the quarterly formula.

Step 3 — Evaluate period by period. $10{,}000 \to 10{,}200 \to 10{,}404 \to 10{,}612.08 \to 10{,}824.3216$. …

Using the annual rate directly in a 4-period formula, i.e. computing $(1.08)^4$ instead of $(1.02)^4$, inflates the answer substantially — the rate must always be divided by …