A certain loan was returned in two equal half-yearly instalments each of Rs 6760. If the rate of interest was 8% pa compounded half-yearly, how much was the interest paid on the loan?
Show answer & explanation
Correct answer: B
Explanation
Note: The question has been modified since it was incorrect according to the answer key released by SSC.
The correct answer is option 2 i.e. 770.
Rate = 8% p.a.
Let the initial amounts for both the half-yearly instalments be x1 & x2
x1 = (25/26) × 6760
= 6500
x2 = (25/26)2 × 6760
= 6250
Interest = ( 6760 + 6760) - ( 6500 + 6250)
= Rs. 770