What will be the compound interest on a sum of ₹3,750 when interest is compounded semi-annually at 16% per annum for one year?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹624.
Semi-annual rate = 16/2 = 8%
Number of periods = 1 year = 2 half years
Amount = 3750 × (1 + )2
⇒ 3750 × (1 + )2
⇒ 3750 × ()2 = ₹4374
⇒ CI = 4374 - 3750 = ₹624