What is the compound interest (in ₹) on a sum of ₹ 62,500 for 2 years at 12% p.a., if the interest is compounded 8-monthly?
Answer & explanation
Correct answer: option 2
Principal = Rs 62,500
Rate = 12% p.a
Time = 2 years
Interest is Compounded 8-monthly , so Rate become 2/3 times (8/12) so
Rate = 12% x \(\frac{2}{3}\) = 8% per 8 months = \(\frac{2}{25}\)
time = 2 × 3/2 = 3 (8 months)
Therefore,
Alternate:
Principal = Rs 62,500
Rate = 12% p.a
Time = 2 years
Interest is Compounded 8-monthly , so Rate become 2/3 times (8/12) so
Rate = 12% x \(\frac{2}{3}\) = 8% per 8 months
time = 2 × 3/2 = 3 (8 months)
Hence,
Principal : Amount
1st (8mnt) 25 : 27
2nd (8mnt) 25 : 27
3rd (8mnt) 25 : 27
15625 : 19683
Compound Interest = Amount - Principal = 19683 - 15625 = Rs 4058
ATQ,
Principal = 62500
15625 unit = 62500
1 unit = 4
Compound Int. = 4058 unit = 4058 x 4 = Rs.16,232