Question
Vikas invested Rs. 12,000 at an annual compound
interest rate of 30%, with the interest being compounded annually after every 10 months. What is the interest Vikas will earn after 20 months?Solution
Effective time period = 20 ÷ 10 = 2 terms Effective rate of interest = 30 X (10/12) = 25% So, compound interest received = 12000 X {1 + (25/100)}2 - 12000 = 12000 X 1.252 - 12000 = Rs. 6,750
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