What would be the (Approximate) compound interest (in Rs.) on the principal amount of Rs.10,000 for 2 years at an interest rate of 16% per annum (compounding is done half-yearly)?
Show answer & explanation
Correct answer: D
Explanation
The Correct answer is option 4 i.e. 3604
Given that
Principa;= Rs.10,000
Time = 2 years at an interest Rate of 16% per annum
If compounded half yearly then
Time = 2 × 2 = 4 years
Rate = 16/2 = 8% p.a.
Formula used
C.I. = Principal (1+ rate/100)time - Principal
Calculation
C.I. = 10000 (1+ 8/100)4 - 10000
= 13604.8 -10000 = Rs. 3604.8
Hence, the (Approximate) compound interest is Rs. 3604