A man borrows money on compound interest and return it in two equal half - yearly installments
of Rs 4410 each. Find the interest charged if the rate of interest is 10 % p.a. compounded half -
yearly.
(a) Rs 600
(b) Rs 720
(c) Rs 620
(d) Rs 660
Answers
Answer: A man borrows money on compound interest and return it in two equal half - yearly installments of Rs 4410 each.If the rate of interest is 10 % p.a. compounded half -yearly the interest charged would be rs 620. Option (c) Rs 620 is the correct answer.
Step-by-step explanation:
Given - Two equal half yearly installments each = 4410
Rate of interest = 10%
For half yearly rate of interest = 5%
The amount of Rs. 4410 paid as an installment at the end of first six months.
Principal = 4410 ÷ ( 1 + 5/100)
= 4410 ÷ 21/20
= 4410 × 20 / 21
= 4200
Similarly the value which amounts to 4410 after 1 year at the rate of 5% compound interest .
4410 ÷ ( 1+ 5/100 )²
⇒ 4410 × 20/ 21× 20/21
⇒ 4000
Total amount in 1 year after interest is 4200+4000 = 8200
Installments = 4410 + 4410 = 8820
Interest = 8820 - 8200
= 620
Option (c) Rs 620 is the correct answer.
To know more about compound interest from the given link
https://brainly.in/question/55069020
To know more about simple interest from the given link
https://brainly.in/question/55567822
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