CA Foundation · Quantitative Aptitude · Mathematics of Finance
Find the compound interest on ₹40,000 for 6 months at 8% per annum, compounded quarterly.
The compound interest is ₹1,616. At 8% compounded quarterly the rate per quarter is 2% for 2 quarters, so the amount is 40,000 × 1.0404 = ₹41,616. Subtracting the principal leaves ₹1,616.
- A₹1,600
- B₹1,616Correct
- C₹1,664
- D₹3,232
Explanation
Quarterly rate = 8/4 = 2%, and 6 months is 2 quarters. Amount = 40,000 × (1.02)^2 = 40,000 × 1.0404 = ₹41,616. Compound interest = ₹1,616. The option ₹1,600 is simple interest for 6 months at 8%, which ignores compounding.
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