A lender provides a loan of Rs. 2000 for a period of six months at an annual interest rate of 20%. If the interest is compounded quarterly, what will be the total amount payable at the end of the term?

Explanation

The amount is calculated using compound interest compounded quarterly. The formula is A = P(1 + r/n)^(nt), where P = 2000, r = 0.20, n = 4 (quarterly), and t = 0.5 years. Substituting the values: A = 2000(1 + 0.20/4)^(4*0.5) = 2000(1.05)^2 = 2000 × 1.1025 = Rs. 2205.