Question

Tick the correct answer in each of the following:

The compound interest on Rs 40000 at $6\%$ per annum for 6 months, compounded quarterly, is

(a) Rs 1209 (b) Rs 1902 (c) Rs 1200 (d) Rs 1306

Answer 1

$\text{Principal (P) = Rs. 40000}\text{Rate (R) =}6\%p.a.\frac{6}{4}=\frac{3}{2}\%\text{quarteraly}\text{Period (n) = 6 months = 2 quaters}\therefore \text{Amount = P}{(1+\frac{R}{100})}^n=Rs.40000{(1+\frac{3}{2\times 100})}^2=Rs.40000\times \frac{203}{200}\times \frac{203}{200}=Rs.41209\text{C.I. = A - P = Rs. 41209 - 40000}=Rs.1209\left(a\right)$