Find the compound interest on ₹7,000 at 9% p.a. for 1 year 8 months, compounded annually.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. ₹1,087.80.
P = 7000, R = 9%, Time = 1 year 8 months
First year (CI):
Amount = 7000 × 1.09 = ₹7630
Next 8 months
Simple interest on 7630
SI = = ₹457.8
Final amount = 7630 + 457.8 = ₹8087.8
Compound Interest = 8087.8 − 7000 = ₹1087.8