Rs.4,000 is given at 5% per annum for one year and interest is compound half yearly. Rs.2,000 is given at 40% per annum compound quarterly for 1 year. The total interest received is nearest to:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e Rs.1,130.70
| Understanding | Application |
| Here we will use properties of compound interest to find out the best possible answer. |
When principal = 4,000 Amount = P[1 + r / 100]n Amount = 4000[1 + 5 / 200]2 ⇒ Rs. 4205.5 When pincipal = 2000 Amount = 2000[1 + 40 / 400]4 ⇒ Rs. 2928.2 Interest = Amount - Principal ⇒ Interest = (4205.5 + 2928.2) - (4000 + 2000) ⇒ Rs. 1133.7 |