Multiple choice

The compound interest on Rs. 16,000 for 9 months at 20% per annum, interest being compounded quarterly, will be

  1. Rs. 1922

  2. Rs. 2522

  3. Rs. 7040

  4. Rs. 2562

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 16000, Rate = 20% per annum (5% per quarter), Time = 9 months (3 quarters). Amount = 16000 * (1 + 0.05)^3 = 16000 * 1.157625 = 18522. Interest = 18522 - 16000 = 2522.

AI explanation

For quarterly compounding, the new rate is 20% / 4 = 5% per quarter, and the total time is 9 months * 4 / 12 = 3 quarters. The compound amount formula gives A = 16000 * (1 + 5/100)^3 = 16000 * 1.157625 = 18522. Subtracting the principal of 16000 gives a compound interest of Rs. 2522.

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