Question

The C.I. to be paid when a sum of ₹ 1,600 is taken for 24 months at 8% per annum compounded semi annually is

(Calculator may be used for calculations)

• A. ₹ 260 (approx)
• B. ₹ 265 (approx)
• C. ₹ 272 (approx)
• D. ₹ 284 (approx)

Answer 1

The correct option is C

₹ 272 (approx)

Given P = ₹ 1,600; R = 8 % and T = 2 years

Compound Interest is reckoned half yearly

Hence C.I for the first half year is given by

C. I = $\frac{PRT}{100}$

= $\frac{1600\times 8\times 1}{2\times 100}$ = $₹64$

For the second part of the year or second half year ,

P = 1600 + 64 = 1664

Hence C. I for the second half year is given by,

C.I = $\frac{PRT}{100}$

= $\frac{1664\times 8\times 1}{2\times 100}$ = $₹66.56$

For the third half year ,

P = 1664 + 66.56 = ₹ 1730.56

Hence C. I for the third half year is given by,

C.I = $\frac{PRT}{100}$

= $\frac{1730.56\times 8\times 1}{2\times 100}$ = $₹69.2224$

For the fourth half year ,

P = 1730.56 + 69.2224 = ₹ 1799.7824

Hence C. I for the fourth half year is given by,

C.I = $\frac{PRT}{100}$

= $\frac{1799.7824\times 8\times 1}{2\times 100}$ = $₹71.991296$

Hence the total C.I = ₹ ( 64 + 66.56 + 69.2224 + 71.991296 )

= ₹ 271.773696, which is approximately ₹ 272