Calculate the compound interest on Rs. 5000 for 2 years at 20% per annum when compounded half yearly.
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Correct answer: D
Explanation
The correct answer is option 4 i.e. 2,320.50.
Half-yearly rate = 20%/2 = 10%
Time (n) = 2 years = 4 half-years
Amount = P(1 + R/100)n
= 5000(1 + 10/100)4
= 5000(1 + 1/10)4
= 5000 × 11/10 × 11/10 × 11/10 × 11/10
= 7320.50
CI = 7320.50 – 5000 = 2320.50