Find the amount (integral value only) if a sum of ₹6,500 is being borrowed at 10% interest per annum for 2 years if interest is compounded half-yearly.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. ₹.7,900
Given that
The sum P = 6500 Rs
Rate compounded half yearly R = 10/2 = 5%
Time T = 2 × 2 = 4 years
Formula used
A = P(1 + R/100)T
A = 6500 × (1+ 5/100)4 = 6500 × (21/20)4 = 7900 Rs