What will be the compound interest (nearest to integer) on a sum of Rs. 25,000 for 2 years at 12% p.a., if the interest is compounded 8 monthly?
Show answer & explanation
Correct answer: B
Explanation
Correct Answer is option 2 i.e. Rs. 6,493
|
Concept |
Understanding |
Application |
|
For CI: A = P(1 + r/100)t |
Given: Interest (r = 12% per annum) is compounded 8-monthly: 2 years = 24 months = 3 times compounded 8-monthly. Rate of CI for 12 months = 12% Rate of CI for 8 months = 12 × 8/12 = 8% P = Rs. 25,000 |
A = 25000(1 + 8/100)3 ⇒ A = 25000 × (27/25) × (27/25) × (27/25) = 25000 × (19683/15625) = Rs. 31492.8 ∴ Required Interest = 31492.8 – 25000 = Rs. 6492.8 |