If C is the compound interest on ₹ 10,000 for one year at 4\% per annum when compounded quarterly, then which one of the following is correct?
- A. C \lt ₹ 100
- B. ₹ 100 \lt C \lt ₹ 200
- C. ₹ 200 \lt C \lt ₹ 400
- D. C \gt ₹ 400 ✓
Correct Answer: D. C \gt ₹ 400
Explanation
Rate per quarter r = 1\%, time n = 4 quarters. The amount is A = 10000(1 + 0.01)^4 \approx 10000(1.0406) = 10406. The compound interest is C \approx 406, which is strictly greater than ₹ 400.
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