Compute the compound interest on Rs. 1000 for 2 years at 10% per annum when compounded half-yearly.
The correct option is C: Rs. 215.50
Given: Principal, P=Rs.1000
Rate, R =5% per half year (Rate was given per annum means yealy, when compounded half yearly then we have to divide yearly interest by 2)
Time =2 years
n = no.of times interest added =4 (in 2 years when compunded half yearly)
∴Amount,A=P(1+R100)n
A=1000(1+5100)4
=1000×105100×105100×105100×105100
=1000×2120×2120×2120×2120
=1215.50
C.I=A−P=1215.50−1000=Rs.215.50