Question

What is the difference between compound interest on 5000 for 1 and half years at 4% per annum according as the interest is compounded yearly and half-yearly and quarter yearly and all yearly to yearly and yearly?

Answer 1

What is the difference between compound interest on 5000 for 1 and half years at 4% per annum according as the interest is compounded yearly and half-yearly and quarter yearly and all yearly to yearly and yearly?

Answer:

Rs. 2.04

Solution:

Principal amount= Rs 5000

Time period= one and half years

Rate= 4%

So,

5000*(1+ 4/100)*(1+2/100)

= Rs 5304.

Compound Interest for one and half year when it will be compounded yearly is

Rs 5304- Rs 5000

Rs 304

Amount for one and half year to be compounded half yearly is :

= 5306. 04

Difference in the compound interest would be

5306.04-5000

= Rs 2.04