Question

What is the compound interest on Rs 12000 in 2 years at 4% per annum, the interest being compounded half-yearly?

• A. 983.15
• B. 987.16
• C. 989.18
• D. 990
• E. 991.16

Answer 1

The correct option is C 989.18

Since interest in compounded half-yearly time $=2\times 2=4\text{Total amount =}12000\times (1+\frac{2}{100}{)}^4=12000\times \frac{51}{50}\times \frac{51}{50}\times \frac{51}{50}\times \frac{51}{50}=12989.19$
Interest = 12989.16-12000
=989-18