Multiple choice

The compound interest on Rs 8,000 at 20% per annum for 9 months compounded quarterly is

  1. 1,260

  2. 1,261

  3. 1,271

  4. 1,281
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For quarterly compounding, the rate is 20%/4 = 5% per quarter, and 9 months equals 3 quarters. The amount is 8000 * (1.05)^3 = 8000 * 1.157625 = 9261. The compound interest is 9261 - 8000 = 1261.

AI explanation

Using the quarterly compounding formula A = P(1 + R/400)^(4N), the principal is 8000, the quarterly rate is 5%, and the number of periods is 3. The calculation is 8000 * (1.05)^3 = 8000 * 1.157625 = 9261. Subtracting the principal gives 9261 - 8000, so the compound interest is 1,261.

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