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Question
A bank offers 5% compound interest calculated on a half-yearly basis. A customer deposits ₹1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is
Options
₹120
₹121
₹122
₹123
MCQ
Solution
₹121
Explanation :
Amount = ₹`[1600xx(1+5/(2xx100))^2+1600 xx(1+5/(2xx100))]`
= ₹`[1600xx41/40xx41/40+1600xx41/40]`
= ₹`[1600xx41/40(41/40+1)]`
= ₹`[(1600xx41xx81)/(40xx40)]=₹3321`
∴ CI = ₹(3321 - 3200) = ₹121
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Simple and Compound Interest (Entrance Exam)
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