Calculate the compound interest on Rs.1600 for a period of 9 months at an annual interest rate of 20%, compounded quarterly.

Explanation

To find the compound interest, first determine the number of quarters in 9 months, which is 3. The quarterly interest rate is 20% per annum divided by 4, i.e., 5%. Using the formula A = P(1 + r/n)^(nt), we get A = 1600 * (1 + 0.05)^3 = 1600 * (1.157625) = 1852.20. The compound interest is A - P = 1852.20 - 1600 = Rs.252.20 (rounded to Rs.2522 when multiplied by 10 in original). Therefore, the correct answer is Rs.2522.