Multiple choice

Passage

Read the following information carefully to answer the questions. Four persons (P, Q, R and S) are started a business together by investing the amount of Rs. 20000, Rs. 30000, Rs. 50000 and Rs. 60000 respectively. After 4 months, P and R increased the initial investment 20 % and 40 % respectively. At the end of the year, they earned a total profit of Rs. 171600. The person A and B borrows P and R’s share. They are giving 8 % simple interest for 4 years. The person C borrows Q’s total amount (ie., Initial investment + Profit) for 2 years at the rate of 6 % compound interest.

Find the compound interest, person C has to pay for the person Q?

  1. Rs. 7152.70

  2. Rs. 6976.50

  3. Rs. 7323.30

  4. Rs. 7897.60

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Use the compound interest formula: A = P(1 + R/100)^T. The compound interest is A - P. Find the principal, rate, and time for C's payment to Q from the data table, then apply the formula. The answer Rs. 7323.30 includes the compounding effect.

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