Question

find the difference between the c.i. on rs 25000 at 16% per annum for six months compounded half yearly and quarterly respectively. which option is better

Answer 1

Here is your answer
P= Rs 25000 , R = 16% p.a =16/2 =8% Half yearly
T=6 Months =n = 1 half yearly

As we know A= P{1+R/100}*n
=25000{1+8/100}*1
=25000(108/100}
=27000
C I = A - P = 27000- 25000 = Rs 2000

FOR COMPOUNDED QUARTERLY -

P= Rs 25000 , R =16%p.a = 16/4 =4% Quaterly
T=6 months = n =2 Quarter

As we know A= P[1+R/100}*n
=25000{1+4/100}*2
= 25000{104/100}*2
= 25000x104x104/100x100
= 27,040
C I = A - P = 27040 - 25000 = Rs 2040

DIFFERENCE BETWEEN C .I ON HALF YEARLY AND QUARTERLY IS (2040 -2000) = Rs 40 is more in compounded quarterly

HENCE COMPOUNDED QUARTERLY IS BETTER

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Answer 2

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