| Compounded Yearly | Compounded Quarterly |
|---|
| Interest is added after every one year to form a new principal | Interest is added after every three months to form a new principal |
| No Change in Rate of Interest | Rate of Interest is equal to one-fourth of annual rate i.e. R = R/4 |
| No Change in Time | Since in one year there are four quarters, so T = 4T |
| Amount = P ( 1 + R / 100 ) T | Amount = P ( 1 + R / 400 ) 4T |
| CI = P [ ( 1 + R / 100 ) T - 1] | CI = P [ ( 1 + R / 400 ) 4T - 1] |
