Question

Calculate the C.I. to be paid when a sum of ₹20,000 is taken for one year at 10% per annum compounded semi annually.

• A. ₹2050
• B. ₹2060
• C. ₹2070
• D. ₹2080

Answer 1

The correct option is A

₹2050

Given P = ₹20,000, R = 10 % and T = 1 year

Since the interest is compounded half yearly, interest has to be calculated twice a year.

Since the interest is 10% each year, it is 5% for 6 months.

Hence C.I for the first half year is given by

C. I = $\frac{PRT}{100}$

= $\frac{20000\times 5\times 1}{100}$ = $₹1000$

For the second part of the year or second half year ,

P = 20000 + 1000 = 21000

Hence C. I for the second half year is given by,

C.I = $\frac{PRT}{100}$

= $\frac{21000\times 5\times 1}{100}$ = $₹1050$

Hence the total C.I = ₹( 1000+ 1050)
= ₹2050