Question

What is the difference between the compound interests on Rs. 5000 for $1\frac{1}{2}$ years at 4% per annum compounded yearly and half-yearly ?

• A. Rs. 2.04
• B. Rs. 3.06
• C. Rs. 4.80
• D. Rs. 8.30

Answer 1

The correct option is A Rs. 2.04

C.I yearly
Principal=5000 Rs.
Time =1.5 years
Interest rate=4 %
$Amount=5000(1+\frac{4}{100})(1+\frac{2}{100})$
$\Rightarrow 5000\times \frac{104}{100}\times \frac{102}{100}$
$\Rightarrow 5304Rs.$
Then $C.I=5304-5000=304Rs.$
C.I.half yearly
Principal=5000 Rs
Time=1.5 years=3 quarter
Rate =4%
$Amount=5000(1+\frac{2}{100})(1+\frac{2}{100})(1+\frac{2}{100})$
$\Rightarrow 5000\times \frac{102}{100}\times \frac{102}{100}\frac{102}{100}$
$\Rightarrow 5306.40$
Then $C.I=5306.40-5000=306.04$
Diference between C.I.=$306.04-304=2.04Rs.$