How much interest would Sonia have to pay on a loan of Rs.25,000 at the rate of 12% p.a. compounded quarterly for the period of 1 year (rounded off to two decimal places)?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs.3,137.72
The loan amount P = 25000 Rs
The rate of interest r = 12% p.a.
Time = 1 year
When compounded quarterly
The rate (r ) = 12/4 = 3 %
Time (t) = 1 × 4 = 4 years
A = P (1 + r / 100)t
C.I = A - P
A = 25000 ( 1 + 3/100)4
A = 28137.72
Hence, C.I = A - P = 28137.72 - 25000 = 3137.72 Rs