Multiple choice

Find the compound interest on Rs. 1,25,000 for 9 months at 8% per annum, compounded quarterly.

  1. 7551

  2. 7651

  3. 7650

  4. 7655
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 125000, Rate = 8% p.a. = 2% per quarter. Time = 9 months = 3 quarters. Amount = 125000 * (1 + 0.02)^3 = 125000 * 1.061208 = 132651. Interest = 132651 - 125000 = 7651.

AI explanation

For quarterly compounding, the principal is 125000, the new rate is 8/4 = 2% per quarter, and the time is 9/3 = 3 quarters. The formula for the amount is 125000 * (1 + 2/100)^3, which equals 125000 * (51/50)^3. Calculating this gives 125000 * 132651/125000 = 132651. The compound interest is the amount minus the principal, which is 132651 - 125000 = 7651.

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