10% annually is 10/4%=2.5% quarterly. Let's call the principal amount P to see what happens in the arithmetic. Let's call the percentage annual interest rate r, and replace it later with actual values. We can replace P later with 8,300. After the 1st quarter, the interest would be Pr/400, because r is a percentage and we need an actual fraction, and the quarterly interest rate is a quarter of the annual rate. The amount becomes P+Pr/400 or P(1+r/400). OK so far? In three years we have 3*4=12 quarters, so we are going to apply this formula 12 times: P(1+r/400)*(1+r/400)*...*(1+r/400)=P(1+r/400)^12. Now let's put in the numbers: 8300(1+0.025)^12⇒8300(1.025)^12=11162.58 and the interest is this amount less the original amount: 2862.58. Amount is 11,162.58 and interest is 2,862.58.