Multiple choice

Compound interest on Rs. 500 at 10% (half yearly) for 1 ½ years will be

  1. Rs. 78.81

  2. Rs. 77.21

  3. Rs. 75.56

  4. Rs. 80.02
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A Correct answer
Explanation

Principal = 500, Rate = 10% per annum (5% half-yearly), Time = 1.5 years (3 half-years). Amount = 500 * (1.05)^3 = 500 * 1.157625 = 578.8125. Interest = 578.81 - 500 = 78.81.

AI explanation

For half-yearly compounding, the rate is 5% and the time is 3 periods. Using the compound interest formula, A = 500 * (1 + 5 / 100)^3. This gives the amount as 500 * 1.157625 = 578.8125. Subtracting the principal of 500 gives a compound interest of Rs. 78.81.

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