Question

What will be the compound interest on a sum of ₹22,500 at the rate of 16% per annum for 1 year, when interest is compounded half yearly? 

Options

• ₹3,600

• ₹3,700

• ₹3,744

• ₹36,244

Answer 1

₹3,744

Explanation:

Principal = 22500, Rate = 16%

Compond half yearly,

So, Rate = `16/2` = 8% and Time= 1 × 2 = 2 years

So, C.I = `"P"[("I" + "R"/100)^"r" - "I"]`

= `22500 [("I" + 8/100)^2 - 1]`

= `22500 [(27)^2/(25)^2 - 1]`

= `22500 [((27)^2 - (25)^2)/625]`

= `22500/625 (2 xx 52)`

C.I. = `900/25 xx 104`

= 36 × 104

= ₹3,744