Question

Find the compound interest on Rs. 125000 for 9 months at 8% per annum compounded quarterly.
A. Rs. 1175
B. Rs. 7651
C. Rs. 7561
D. Rs. 6056

Answer 1

Hint: Such types of questions can be solved with the help of the formula of compound interest. Here interest is compounded quarterly so we convert the interest rate annum to quarterly as well as total times in a number of quarters.

Complete step-by-step solution -
Given, P=125000,
As compounded quarterly R = $\dfrac{8}{4}$ = 2%
Time = 9 months = $\dfrac{9}{{12}}years = \dfrac{9}{{12}}$ ×4 quarters =3 quarters
We know, Amount = A = ${\left( {1 + \dfrac{R}{{100}}} \right)^n}$
A = 125000 ${\left[ {1 + \left( {\dfrac{2}{{100}}} \right)} \right]^3}$ = Rs. 132651
As compound interest C.I = Amount-principle value
C.I = Rs. [132651−125000] = Rs. 7651

Note: Question as mentioned above was solved with the help of the formula of compound interest, as we placed all the required data in the formula and solving it would help in finding the answer. Only with the help of cleared up basics of compound interest would help in solving the data.