Q. The compound interest on 16000 Rs. for 9 months at 20% per annum, interest being compounded quarterly, is:
Answer: Rs. 2522
Notes: The interest is compounded quarterly, $ \therefore R = \frac{20}{4} = 5\%$ Time = 3 quarters $ \therefore C.I. = P\left [ \left ( 1+\frac{R}{100} \right )^{T} – 1 \right ]$ $ = 16000\left [ \left ( 1+\frac{5}{100} \right )^{3} – 1 \right ]$ $ = 16000\left [ \left ( \frac{21}{20} \right )^{3} – 1 \right ]$ $ = 16000\left ( \frac{9261 – 8000}{8000} \right )$ $ = 16000\times \frac{1261}{8000} = 2522 Rs.$ Hence option [C] is correct answer.