What is the compound interest (in RS) on a sum of Rs 62,500 for 2 years at 12% p.a., if the interest is compounded 8- monthly?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 16232
Principal = Rs. 62500
Time = 2 years
Rate = 12%
Compound Interest = P[(1 + R/100)T - 1]
When interest is being calculated at 8 monthly -
Rate = (R/12) × 8
Time = T × (3/2)
12% interest for 12 months. So, 8% interest for 8 months
Time = 2 × (3/2) = 3
C.I. = 62500[(1 + 8/100)3 - 1] = 62500[(27/25)3 - 1] = 62500[(19683/15625) - 1] = 62500[(19683 - 15625)/15625] = 62500[(4058)/15625] = 16232