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Compound Interest
The compound interest on Rs 16,000 for 9 months at 20% per annum compounded quarterly is: ________?
Explanation and memory cue
The compound interest on Rs 16,000 for 9 months at 20% per annum compounded quarterly is calculated as follows: The quarterly interest rate is 20%/4 = 5%. The number of quarters in 9 months is 3. Using the compound interest formula A = P(1 + r)^n, the amount A = 16000 * (1 + 0.05)^3 = 16000 * 1.157625 = Rs 18,522 (approximately). The compound interest is the amount minus the principal, i.e., 18522 - 16000 = Rs 2522. This matches option C exactly, so the correct answer is C, not B. The original explanation incorrectly chose the closest option instead of the exact match.