Tick (✓) the correct answer

Question:

Tick (✓) the correct answer:

The compound interest on Rs 40000 at 6% per annum for 6 months, compounded quarterly, is

(a) Rs 1209

(b) Rs 1902

(c) Rs 1200

(d) Rs 1306

Solution:

(a) Rs 1209

Time $=6$ months $=2$ quater years

Rate compounded quarter yearly $=\frac{6}{4} \%=\frac{3}{2} \%$

Now, $A=P \times\left(1+\frac{R}{100}\right)^{n}$

$=$ Rs. $40000 \times\left(1+\frac{3}{100 \times 2}\right)^{2}$

$=$ Rs. $40000 \times\left(\frac{203}{200}\right)^{2}$

$=$ Rs. $40000 \times\left(\frac{203}{200}\right) \times\left(\frac{203}{200}\right)$

$=$ Rs. $(203 \times 203)$

$=$ Rs. 4120

$\therefore$ Compound interest $=$ amount $-$ principal $=$ Rs. $41209-$ Rs. $40000=$ Rs. 1209

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