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
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B
₹ 8321
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C
₹ 9423
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D
₹ 9724
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Solution

## The correct option is D ₹ 9724Given 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

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