Multiple choice

What would be the compound interest on Rs. 18,000 at 20% per annum for 9 months, compounded quarterly?

  1. Rs. 2,950.15

  2. Rs. 2,850.12

  3. Rs. 2,800.19

  4. Rs. 2,837.25

  5. Rs. 2,900.17
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Principal = 18000, Rate = 20% p.a. = 5% per quarter, Time = 9 months = 3 quarters. Amount = 18000 * (1 + 0.05)^3 = 18000 * 1.157625 = 20837.25. Interest = 20837.25 - 18000 = 2837.25.

AI explanation

Interest compounded quarterly requires dividing the annual rate by 4 and multiplying the time in years by 4, giving a rate of 5% per quarter for 3 periods. Using the compound amount formula, the amount is 18000 * (1 + 5/100)^3 = 18000 * 1.157625 = 20837.25. Subtracting the principal of 18000 from this amount gives a compound interest of Rs. 2837.25.

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