Question

Find the compound interest on rs. 5000 for 9 months at 6% per annum, if the interest is reckoned quarterly. Select correct option.

Answer 1

Answer:

Interest rs. 228.39

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Step-by-step explanation:

The amount after compounding interest for n compounding periods, starting with principal P, and rate per period r, is

A = ( 1 + r )ⁿ P

Here, compounding period is 3 months (quarterly), so

n = 3  ( 9 months )

r = 6% / 4 = 1.5% = 0.015   ( the 6% is per annum, we need per quarter )

P = 5000

So the final amount is

A = 1.015³ × 5000 ≈ 5228.39

The interest was this less the principal:

I = A - P = 5228.39 - 5000 = 228.39