Multiple choice

Find the difference between the compound interests when compounded half yearly and compounded quarterly on Rs. 900 for 1 year at a rate of 20% per annum.

  1. Rs. 5.95

  2. Rs. 5.60

  3. Rs. 4.95

  4. Rs. 4.50
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For half-yearly compounding, the amount is 900 * (1 + 0.10)^2 = 1089, interest = 189. For quarterly compounding, the amount is 900 * (1 + 0.05)^4 = 1093.95, interest = 193.95. The difference is 193.95 - 189 = 4.95.

AI explanation

For half yearly compounding, the rate is 10% per half year and the amount is 900 * (1 + 10/100)^2, which equals Rs. 1089. For quarterly compounding, the rate is 5% per quarter and the amount is 900 * (1 + 5/100)^4, which equals Rs. 1093.95. The difference between the compound interests is 1093.95 - 1089, giving Rs. 4.95.

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