If interest be compounded half-yearly, then find the compound interest on ₹8,000 at the rate of 20% per annum for 1 year.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹1,680
Given that
If interest is compounded half-yearly
Rate r = 20%/2 = 10%
Years n = 1 * 2 = 2 years
Principal amount P= 8000 Rs
CI = P * (1 + (r/100))n - P
= 8000 * (1 + (10/100))2 - 8000
= 8000 * 121/100 - 8000 = 80*121 - 8000 =1680 Rs