What is the compound interest on a sum of Rs.8,100 for 1(1/4) years at 8% per annum, if the interest is compounded 5-monthly? (Nearest to Rs.1)
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Rs.837
| Application | Understanding |
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Let the compound interest be CI, the principal be P, the rate of interest be r and the time period be T. ⇒ CI = P(1 + r/100)T - P |
The number of years = 1(1/4) ⇒ 5/4 years ⇒ CI = P(1 + r/100)T - P ⇒ CI = 8100(1 + 10/300)3 - 8100 ⇒ 8937.5 - 8100 ⇒ Rs. 837.5 or Rs.837 |