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Mr. Yashwanth invested money in FD. How ...

Mr. Yashwanth invested money in FD. How much will he get on maturity, If Rs. 10000 is invested at 20% per annum compund interest for 6 months, compounded quaterly ?
A. 11025.25
B. 11025
C. 11025.75
D. 11025.5

A

D

B

B

C

A

D

C

Text Solution

AI Generated Solution

The correct Answer is:
To solve the problem of how much Mr. Yashwanth will get on maturity for his investment of Rs. 10,000 at 20% per annum compound interest for 6 months, compounded quarterly, we can follow these steps: ### Step-by-Step Solution: 1. **Identify the Variables:** - Principal (P) = Rs. 10,000 - Annual Interest Rate (R) = 20% per annum - Time (T) = 6 months = 0.5 years - Compounding Frequency (n) = 4 (quarterly) 2. **Calculate the Quarterly Interest Rate:** - The quarterly interest rate can be calculated as: \[ r = \frac{R}{n} = \frac{20\%}{4} = 5\% = \frac{5}{100} = 0.05 \] 3. **Calculate the Number of Compounding Periods:** - Since the investment is for 6 months and compounding is quarterly, the number of compounding periods (t) is: \[ t = n \times \text{Time in years} = 4 \times 0.5 = 2 \] 4. **Use the Compound Interest Formula:** - The formula for compound interest is: \[ A = P \left(1 + r\right)^t \] - Substituting the values we have: \[ A = 10000 \left(1 + 0.05\right)^2 \] 5. **Calculate the Amount:** - First, calculate \( (1 + 0.05)^2 \): \[ (1 + 0.05)^2 = 1.05^2 = 1.1025 \] - Now, substitute back into the formula: \[ A = 10000 \times 1.1025 = 11025 \] 6. **Final Amount:** - Therefore, the maturity amount Mr. Yashwanth will receive is Rs. 11,025. ### Conclusion: The correct answer is **B. 11025**.
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