Multiple choice

Find the compound interest on Rs. 4400 for a year at a rate of 10% p.a. with interest reckoned half-yearly.

  1. Rs. 300

  2. Rs. 420

  3. Rs. 275

  4. Rs. 451

  5. Rs. 425
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For half-yearly compounding, rate = 5% and time = 2 periods. Amount = 4400 * (1 + 5/100)^2 = 4400 * (1.05)^2 = 4400 * 1.1025 = 4851. Interest = 4851 - 4400 = 451.

AI explanation

For half-yearly compounding, the principal of 4400 is multiplied by 1 plus 0.10 divided by 2, all raised to the power of 2. This gives 4400 multiplied by 1.05 squared, which equals 4851. Subtracting the original principal of 4400 gives a compound interest of Rs. 451.

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