Q.Find the maturity value of a Fixed Deposit of ₹40,000 for 1 year at 8% per annum, compounded quarterly.

This is a direct application of the FD maturity-value formula with quarterly compounding, exactly as practised for compound interest in Class 11 — divide the rate by 4 and multiply the time by 4 to get the per-quarter rate and the number of quarters.

Periods $=4\times1=4$; rate per quarter $=8/4=2\%$.

$A = 40{,}000(1.02)^{4} = 40{,}000\times1.08243216 = 43{,}297.29$

Here $P = ₹40{,}000$, annual rate $r = 8\%$, time $t = 1$ year, compounded quarterly ($n=4$).

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

Step 2 — Apply the FD maturity formula.

Step 3 — Evaluate. $(1.02)^4 = 1.08243216$, so

Step 4 — Interest earned.

Applying the annual rate directly with only 1 compounding period — i.e. computing $40{,}000(1.08)^1$ — ignores that the bank compounds quarterly, not yearly, and understates the true maturity value; the rate must be divided by 4 and the exponent multiplied by 4 whenever the bank compounds quarterly.