The compound interest on a sum of Rs 5,500 at 15% p.a. for 2 years, when the interest is compounded 8 monthly, is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs 1,820.50
Concept
Amount = P ( 1 + R / 100)n
Application
Rate of Interest for 8 months = (15 / 12) x 8 = 10%
Cycle of 8 months in 2 years = 24 / 8 = 3
Principal = 5500
Amount = P ( 1 + R / 100)n
Putting the values
Amount = 5500 ( 1 + 10/100)3
Amount = 5500 ( 11 / 10 )3
Upon solving
Amount = 7320.5
C.I = Amount - Principal
7320.5 - 5500 = Rs. 1820.5