What is the compound interest on a sum of ₹37,500 for $1\frac{1}{3}$ years at a rate of 12% p.a. if the interest is compounded 8-monthly?

₹6,240

Interest is compounded 8 monthly.

Time = \(\frac{4 }{3}\) × 12 = 16 months

Rate = 12%

Then actual rate according to Interest compounded 8 monthly

= \(\frac{8 }{12}\) × 12

= 8%

                     Principal   :    Amount

For 1st year        25       :        27

For 2nd year       25       :        27

------------------------------------------------

                         625      :       729

ATQ,

625R = 37500

1R = 60

Compound interest = ( 729 - 625 )R  = 104R

= 104 × 60

= Rs. 6240