Question

A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits rs. 1600 each on 1st january and 1st july of a year. At the end of the year, the amount he would have gained by way of interest is: rs 120 rs 121 rs 122 rs 123

Answer 1

5pcpa is rate of interest.

2.5 percent in six months

first 40 rupees in six months

final amount 1640 rupees

now 3240 rupees is the new principal for the next tenure

2.5 percent is now 81 rupees

total interest is 121 rupees