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Question

Find the amount of money Vinod will get at the end of 2 years if he invests ₹ 1500 in a bank with an interest rate of 20% compounded half yearly.

A
₹ 2196.15
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B
₹ 2167
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C
₹ 3200
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D
₹ 2389.20
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Solution

The correct option is A ₹ 2196.15
Given
Principal = ₹ 1500
Interest rate (r) = 20% compounded half yearly = 10% compounded yearly

Since, the interest is compounded half yearly, so there will be 4 conversion periods in 2 years.

So, n = 4

By using compound interest, we have

A=P[(1+r100)n]

A=1500[(1+10100)4]

A = ₹ 2196.15

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