Multiple choice

A person borrowed Rs. 10,000 at 12% rate of interest per annum compounded quarterly for a period of 9 months. What is the interest paid by him to settle his account after 9 months?

  1. Rs. 927.27

  2. Rs. 947.47

  3. Rs. 967.67

  4. Rs. 987.87
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A Correct answer
Explanation

Principal = 10000, Rate = 12% per annum, quarterly = 3% per quarter. Time = 9 months = 3 quarters. Amount = 10000 * (1 + 3/100)^3 = 10000 * (1.03)^3 = 10000 * 1.092727 = 10927.27. Interest = 927.27.

AI explanation

Using the compound interest formula, the principal is 10000, the quarterly rate is 12 divided by 4 equals 3%, and the number of quarters in 9 months is 3. The final amount is 10000 times (1.03) cubed, which equals 10000 times 1.092727, or Rs. 10,927.27. The interest paid is the final amount minus the principal, which is 10927.27 minus 10000, making the result Rs. 927.27.

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