Radha deposited ₹1,60,000 at a 10% rate of compound interest per annum for two years. If the interest is compounded semi-annually, what is the compound interest (in ₹)?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 34,481.
We know that,
A = P(1 + R/100)T
here, A = Amount, P = Principal, R = Rate, and T = Time(4 semi-annually)
⇒ A = 160000 × (1 + 5/100)4
⇒ A = 160000 × 1.21550625
⇒ A = ₹194481
Now,
⇒ CI = A - P
⇒ CI = 194481 - 160000
⇒ CI = ₹34481