A sum of Rs. 10500 amounts to Rs. 12705 in 2 years at x % p.a., when the interest is compounded annually. The same sum will amount (in Rs.) to what at 2 x % p.a. in 1 years, when interest compounded half yearly?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 13975.50
A = 12705
P = 10500
n = 2
r = x%
A = P(1+ r/100)n
12705 = 10500 (1 + x/100)2
(11/10)2 = (1 + x/100)2
Comparing both sides
11/10 = 1 + x/100
1/10 = x/100
x = 10%
ATQ,
r = 2x = 20% ; r = 10% (CI for half yearly)
n = 1 = 3 years (CI for half yearly)
A = 10500(1 + 10/100)3
A = 10500 × 1331/1000
A = 13975.50