Question

The C.I. to be paid when a sum of ₹ 40,000 is taken for one and a half years at 12% per annum compounded semi annually is

(Calculator may be used for calculations)

• A. ₹ 10,499 (approx)
• B. ₹ 10,599 (approx)
• C. ₹ 10,699 (approx)
• D. ₹ 10,799 (approx)

Answer 1

The correct option is A

₹ 10,499 (approx)

Given P = ₹ 40,000; R = 12 % and T = $1\frac{1}{2}$ years

Given, compound interest is reckoned half yearly.

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

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

= $\frac{40,000\times 12\times 1}{2\times 100}$ = $₹2400$

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

P = 40,000 + 2,400 = ₹ 42,400

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

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

= $\frac{42,400\times 12\times 1}{2\times 100}$ = $₹2544$

For the third half year ,

P = 42,400 + 2544 = ₹ 44,944

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

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

= $\frac{44944\times 12\times 1}{2\times 100}$ = $₹2696.64$

For the fourth half year ,

P = 44944 + 2696.64 = ₹ 47,640.64

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

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

= $\frac{47640.64\times 12\times 1}{2\times 100}$ = $₹2858.4384$

Hence the total C.I = ₹ ( 2400 + 2544 + 2696.64 + 2858.4384 )

= ₹ 10,499.0784, which is approximately ₹ 10,499