Question

Find the compound interest paid when a sum of ₹64,000 is invested for one year and six months at 5% per annum compounded half yearly.

• A. ₹5421
• B. ₹4830
• C. ₹8545
• D. ₹4921

Answer 1

The correct option is D

₹4921

Given that P = ₹ 64,000 r = 5 % and n = $1\frac{1}{2}$ years

Since, the rate of interest is calculated annually , for 6 months it will be 2.5 %

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

Here r = $\frac{5}{2}$ % and n = 3 half years

$A=64,000(1+\frac{5}{2\times 100}{)}^3$
$A=64,000(\frac{41}{40}{)}^3$
$A=68921$

$\because$ Compound interest = Amount - Principal
= 68921 - 64000
= ₹ 4921