Question

Mrs. Beena wants to invest an amount of ₹ 1,00,000 for her daughter’s educational purpose. She approached two banks which offer different rate of interest as follows:
Which bank will give her a better amount after 2 years?
Bank A Bank B
Rate of 25 % compounded annually Rate 20% compounded half-yearly

Answer 1

Answer : Bank A -

Cause, Annually 25 % compounded is better than the one in Bank B as 20% compounded half-yearly means 40 % compounded annually.

Hope this will help.