Question

Compound interest on a sum of ₹ 5000 in 1.5 years when interest is compounded half-yearly at the rate $20\%$ per annum is

• A. ₹ 1555
• B. ₹ 1455
• C. ₹ 1655
• D. ₹ 1755

Answer 1

The correct option is C

₹ 1655

Given:

P = ₹ 5000

R = $20\%$ per annum, so will be $10\%$ when compounded half-yearly

n = 3 (As 1.5 years has 3 half years in it)

Compound interest will be calculated by C.I
= $[P\times (1+\frac{R}{100}{)}^n]-P$

Substituting the values, we get,

$C.I=[5000\times (1+\frac{10}{100}{)}^3]-5000$

$C.I=[5000\times$$\frac{11}{10}\times$$\frac{11}{10}\times \frac{11}{10}]-5000$

$C.I=₹6655-₹5000$

$C.I=₹1655$