Question

2)What is the difference between the compound interests on Rs. 5000 for 1 year 6 months years at 4% per annum compounded yearly and half-yearly?

Answer 1

Answer:

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Answer 2

Answer:

total amount after 1 1/2 years when interest is compounded yearly.

= P(1 + r/100)¹× (1 + r/200)

= 5000(1 + 4/100) × (1 + 4/200)

= 5000(1 + 0.04)(1 + 0.02)

= 5000 × 1.04 × 1.02

= 5304 Rs.

so, compound interest = 5304 - 5000 = 304 Rs.

total amount after 1 1/2 years when interest is compounded half yearly.

= P(1 + r/200)^2n

= 5000(1 + 4/200)^(2 × 3/2)

= 5000(1 + 0.02)^3

= 5000(1.02)^3

= 5306.4 Rs.

compound interest = 5306.4 - 5000 = 306.4 Rs.

so, difference between them = 306.4 - 304 = 2.04 Rs.