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
• B. ₹ 2167
• C. ₹ 3200
• D. ₹ 2389.20

Answer 1

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

$A=P\left[{(1+\frac{r}{100})}^n\right]$

$A=1500\left[{(1+\frac{10}{100})}^4\right]$

A = ₹ 2196.15