Question

What is the difference between the compound interests on rs. 5000 for 1.5 years at 4% per annum compound yearly and half-yearly?

Answer 1

Principal= Rs 5000
Time= 1.5 years i.e. 1 and a half year= 1¹/₂
Rate= 4%

Compound Interest for 1 year compounded annually:
Compound Interest = Principal [{1+(Rate/100)^Time}-1] = 5000 [{1+(4/100)^1}-1] = Rs 200
Compound Interest for 1 year compounded annually
Compound Interest= Principal [{1+(Rate/200)^Time}-1] = 5200 [{1+(Rate/200)^Time}-1] = Rs 104

Therefore, compound interest when compounded annually = Rs(200+104)= Rs 304

Compound Interest for one year when compounded half yearly:
Compound Interest= Principal [{1+(Rate/200)^2Time}-1] = 5000 [{1+(4/200)^3}-1] = Rs 306.04

Therefore their difference= Rs (306.04-304) = Rs 2.04

Answer 2

Answer:

ans ₹2.04 is the answer ok