Question

The compound interest on Rs 4000 for one year at 10% p.a payable half-yearly is: *
(a) Rs 400
(b) Rs 405
(c) Rs 410
(d) Rs 202.50

Answer 1

Answer:

.Correct option is

B

630.50

Principal P=Rs.4,000. Since the interest is compounded half-yearly the number of conversion periods in 1

1

/2

years are 3. Also the rate of interest per conversion period (6 months) is 10%×

2

1

=5%(0.05 in decimal).

Thus the amount A

n

(in Rs.) is given by

A

n

=P(1+i)

n

A

3

=4,000(1+0.05)

3

=4,630.50

The compound interest is therefore Rs. (4,630.50−4,000)

=Rs.630.50.

Answer 2

Answer:

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