If interest is compounded half-yearly, then find the compound interest on ₹8,000 at 20% p.a. for 1 year.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹1680.
Given that
Principal (P) = ₹8,000
Rate (R) = 20% p.a.
Time (T) = 1 year
If compounded half yearly
R = 20/2 = 10% p.a.
Time (T) = 2 year
Formula used
Compound interest = P (1+ R/100)T - P
Calculation
C.I. = 8000 (1 + 10/100)2 - 8000
C.I. = 8000 (121 - 100)/100
C.I. = 80 × 21 = ₹1680