Multiple choice

Find the compound interest on Rs. $12500$ at $8$% per annum for $9$ months compounded quarterly .

  1. $1020$
  2. $1428$
  3. $765$
  4. $550$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 12500, Rate = 8% per annum (2% per quarter), Time = 9 months (3 quarters). Amount = 12500 * (1 + 0.02)^3 = 12500 * 1.061208 = 13265.1. Interest = 13265.1 - 12500 = 765.1.

AI explanation

For compounding quarterly over 9 months, we use three periods with a quarterly interest rate of 2%. Using the compound interest formula, the final amount is calculated as 12500 multiplied by (1 + 2/100) cubed, which equals 12500 multiplied by 1.061208. This gives a total amount of Rs. 13265.1, meaning the compound interest earned is 13265.1 minus 12500, resulting in Rs. 765.1. The calculated compound interest is therefore Rs. 765.

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