What is the compound interest on a sum of Rs. 37500 for 4/3 years at a rate of 12% p.a. if the interest is compounded 8-monthly?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Rs. 6240
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Understanding |
Application |
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Given: P = Rs. 37500 Time = 4/3 years = 16 months Rate = 12% PA |
Since the interest is compounded 8-monthly: Rate = 12 × 8/12 = 8% Time = 16/8 = 2 |
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For CI: A = P(1 + R/100)T |
So, A = 37500 × (1 + 8/100)2 A = 37500 × 27/25 × 27/25 A = 43740 Hence, CI = 43740 – 37500 = Rs. 6240 |