What is the difference between compound interest on Rs. 5000 compounded yearly and half-yearly for 1 year at 4% per annum?
A. Rs. 2.04
B. Rs. 3.06
C. Rs. 4.80
D. Rs. 8.30
Answer:A
What is the difference between compound interest on Rs. 5000 compounded yearly and half-yearly for 1 year at 4% per annum?
A. Rs. 2.04 B. Rs. 3.06 C. Rs. 4.80 D. Rs. 8.30
Explanation: C.I. when interest is compounded annually = Rs. 5000 x 1 + 4/100 x 1= Rs. 5000 x 26/25 x 51/50 = Rs. 5304. C.I. when interest is compounded half-yearly = Rs. 5000 x 1 + 2 /100 to the power 3 = Rs. 5000 multiplied by 51/50=(5306.04 - 5304) = Rs. 2.04