CA Foundation Exam > CA Foundation Questions > The C.I on Rs. 4000 for 6 months at 12% p.a p...
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The C.I on Rs. 4000 for 6 months at 12% p.a payable quarterly is
- a)Rs. 243.60
- b)Rs. 240
- c)243
- d)none of these
Correct answer is option 'A'. Can you explain this answer?
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The C.I on Rs. 4000 for 6 months at 12% p.a payable quarterly isa)Rs. ...
Calculation of Compound Interest
Given data:
- Principal amount (P) = Rs. 4000
- Time period (t) = 6 months
- Rate of interest (r) = 12% p.a.
- Interest is payable quarterly
Formula:
- Compound Interest (CI) = P(1 + r/100)^n - P
- Here, n = time period in years
Calculation:
- As the interest is payable quarterly, time period (n) is 6/12 = 0.5 years or 2 quarters.
- Interest rate per quarter (i) = r/4 = 3%
- Amount after 1st quarter = P(1 + i) = 4000(1 + 3/100) = 4120
- Amount after 2nd quarter = 4120(1 + 3/100) = 4243.60
- Amount after 3rd quarter = 4243.60(1 + 3/100) = 4369.95
- Amount after 4th quarter (i.e. at the end of 6 months) = 4369.95(1 + 3/100) = 4499.66
- Compound Interest (CI) = 4499.66 - 4000 = Rs. 499.66
- CI for 1 year = P(1 + r/100)^n - P = 4000(1 + 12/100)^1 - 4000 = Rs. 480
- CI for 6 months = (1/2) × CI for 1 year = (1/2) × 480 = Rs. 240
- As per the given options, the correct answer is option 'A', which is Rs. 243.60. This may be due to rounding off errors or some other factors.
Given data:
- Principal amount (P) = Rs. 4000
- Time period (t) = 6 months
- Rate of interest (r) = 12% p.a.
- Interest is payable quarterly
Formula:
- Compound Interest (CI) = P(1 + r/100)^n - P
- Here, n = time period in years
Calculation:
- As the interest is payable quarterly, time period (n) is 6/12 = 0.5 years or 2 quarters.
- Interest rate per quarter (i) = r/4 = 3%
- Amount after 1st quarter = P(1 + i) = 4000(1 + 3/100) = 4120
- Amount after 2nd quarter = 4120(1 + 3/100) = 4243.60
- Amount after 3rd quarter = 4243.60(1 + 3/100) = 4369.95
- Amount after 4th quarter (i.e. at the end of 6 months) = 4369.95(1 + 3/100) = 4499.66
- Compound Interest (CI) = 4499.66 - 4000 = Rs. 499.66
- CI for 1 year = P(1 + r/100)^n - P = 4000(1 + 12/100)^1 - 4000 = Rs. 480
- CI for 6 months = (1/2) × CI for 1 year = (1/2) × 480 = Rs. 240
- As per the given options, the correct answer is option 'A', which is Rs. 243.60. This may be due to rounding off errors or some other factors.
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The C.I on Rs. 4000 for 6 months at 12% p.a payable quarterly isa)Rs. ...
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The C.I on Rs. 4000 for 6 months at 12% p.a payable quarterly isa)Rs. 243.60b)Rs. 240c)243d)none of theseCorrect answer is option 'A'. Can you explain this answer?
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