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?
Answer & explanation
Correct answer: option 2
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