Question

10.The compound interest of an amount for one year @ 12% p.a. will be

maximum if the compound interest is calculated-------.

A) yearly B) half yearly
C) quarterly D) monthly​

Answer 1

Answer:

yearly I think u get your answer.

Answer 2

The compound interest of an amount for one year @ 12% p.a. will be maximum if the compound interest is calculated monthly. Option(d) is the correct answer.

• The compound interest is given by multiplying the initial investment with the rate of interest by the number of times interest is compounded raise to power the product of the number of time periods elapsed and the number of times interest is compounded.

• The formula for compound interest is $A = P(1 + r / n)^{nt}$.
• If the initial amount is 10000, then compound interest on this amount for one year  @ 12% p.a. for yearly, half-yearly, quarterly, and monthly​ will be 1,200, 1,236, 1,255, and 1,268 respectively.
• Hence, the compound interest is maximum if it is calculated monthly.