wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Amit took a loan of ₹ 8000 from the bank for 1 year at an interest rate of 20% per annum. Calculate the amount he has to pay to the bank at the end of this period if the interest rate is compounded quarterly.

A
₹ 9327
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
₹ 8321
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
₹ 9423
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
₹ 9724
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
Open in App
Solution

The correct option is D ₹ 9724
Given
Principal = ₹ 800
Interest rate per annum (r) = 20%
Interest rate quartely = 204 = 5 %

Since the interest is compounded quarterly, so there will be four conversion periods in one year.

So, n = 4

By using formula for compound interest, we can write

Amount = P[(1+r100)n]

Amount=8000[(1+5100)4]

Amount= 9724

flag
Suggest Corrections
thumbs-up
1
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Interest Compounded Annually and Half Yearly
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon