What would be the compound interest on Rs.15,750 at 20% per annum, in two years, if the interest is compounded half yearly
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs.7309.575
CI = P(1 + R/100)T - P
When interest is compounded half yearly then
R = R/2 = 20/2 = 10% and T = 2T = 4
Using equation (1), we get
⇒ CI = 15750 × 1.1 × 1.1 × 1.1 × 1.1 - 15750
⇒ CI = 23059.575 - 15750 = Rs 7309.575