Question

Tick the correct answer in each of the following:

The compound interest on Rs 6250 at $8\%$ per annum for 1 year, compounded half yearly, is

(a) Rs 500 (b) Rs 510 (c) Rs 550 (d) Rs 512.50

Answer 1

$\text{Principal (P) = Rs.~6250}\text{Rate (R) =}8\%\text{p.a. or}4\%\text{half yearly}\text{Period (n) = 1 year or 2 half years}\therefore \text{Amount (A) =P}{(1+\frac{R}{100})}^n=Rs.6250{(1+\frac{4}{100})}^2=Rs.6250\times \frac{26}{25}\times \frac{26}{25}=Rs.6760=\therefore \text{C.I.= A - P = Rs. 6760 - 6250}=Rs.510\left(b\right)$