Question

23. What rate of interest per annum does a person get if
he invests at 40% p.a. compound interest, interest
being compounded half-yearly?
(A) 42% (B) 48% (C) 44% (D) 46%​

Answer 1

Answer:

C. 44%

Step-by-step explanation:

Refer to the attached image:

Same amount for yearly and half-yearly compoundings.

Principal gets cancelled out.

(1 + r/100)^1 = (1 + 40/200)^2

1 + 0.01r = 1.2^2

0.01r = 1.44 - 1

r = 0.44/0.01

r = 44%