Question

is the compound interest received when ₹64,000 is invested for 1.5 years at 5% per annum compounded half yearly.

• A. ₹4919
• B. ₹4921
• C. ₹5118

Answer 1

The correct option is B ₹4921

Given that Principal, P = ₹64,000 Rate (per annum), r = 5 % and Time, n = $1\frac{1}{2}$ years

Since, the rate of interest is calculated annually, for 6 months the half yearly rate will be $\frac{5}{2}$ = 2.5%

We know, the amount A
$A=P(1+\frac{r}{100}{)}^n$
Where,
P = Principal
r = Rate of interest
n = Time

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