Question

Find the compound interest on ₹ 25,000 for one and a half years at 20% per annum, compounded quarterly.

• A. ₹8,502.39
• B. ₹8,102.39
• C. ₹9,102.39
• D. ₹8,302.39

Answer 1

The correct option is A

₹8,502.39

Here, Principal (P) = ₹ 25,000

Rate of interest (R) = 5% (rate of interest of 20% per annum is equivalent to a rate of interest of 5% per 3 months, as interest is compounded quarterly)

Time (n) = 6, as one and a half years has six 3 months in it.

$\text{Amount (A)}=P{(1+\frac{R}{100})}^n$

$=25000{(1+\frac{5}{100})}^6$

$=25000{(1+\frac{1}{20})}^6$

= ₹ 33,502.39

Interest = Amount - Principal
= ₹ 33,502.39 - ₹ 25,000
= ₹ 8,502.39