The interest on Rs. 54,000 loan for nine months at 8% interest per year is

Question

The interest on Rs. 54,000 loan for nine months at 8% interest per year is

1. A. 1340
2. B. 2430
3. C. 3240 (Correct answer)
4. D. 4230

Correct Answer

Option C — 3240

Detailed Solution & Explanation

The correct answer is 3240.

Key Points

• Simple Interest = (P × R × T)/100 = (54,000 × 8 × 9/12)/100 = (54,000 × 8 × 0.75)/100 = 3,24,000/100 = Rs. 3,240.

Additional Information

• Simple interest = PRT/100, with time always expressed in years — nine months is 9/12 = 0.75, not 9.
• The corresponding amount is A = P(1 + RT/100); under compound interest it becomes A = P(1 + R/100)ᵗ.
• Converting months to years before substituting is the single most common slip in these questions.
• For part-years at compound interest, interest for the fractional period is normally taken as simple interest on the amount already accumulated.