How much will the compound interest on Rs. 16000 at 20% per annum for 9 months if it is compounded quarterly?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 2,522.
Rate per quarter (R) = 20/4 = 5%
Time = 9 months = 3 quarters (n)
Amount (A) = P(1 + R/100)n
= 16000(1 + 5/100)3
= 16000(1 + 1/20)3
= 16000 × (21/20)3
= 16000 × (9261/8000)
= 18522
CI = 18522 – 16000 = 2522