Multiple choice

If C is the compound interest on Rs. 10,000 for one year at 4% per annum when compounded quarterly, then which one of the following is correct?

  1. C < Rs. 100

  2. Rs. 100 < C < Rs. 200

  3. Rs. 200 < C < Rs. 400

  4. C > Rs. 400
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 10,000 at 4% per annum compounded quarterly, the rate per quarter is 1%. After 4 quarters, the amount is 10000 * (1.01)^4 = 10406.04. The interest C = 406.04. Since 406.04 > 400, option D is correct.

AI explanation

Applying the formula for compound interest compounded quarterly, the interest equals Principal multiplied by ((1 plus R divided by 400) raised to the power of 4n minus 1). The rate per quarter is 1 percent, so we calculate 10000 multiplied by ((1.01) to the fourth power minus 1). The interest evaluates to approximately Rs. 406, which is greater than Rs. 400. Therefore, the correct option is C greater than Rs. 400.

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