Multiple choice

Rajiv deposits Rs. 20,000 in a bank at 10% per annum for one year. If the interest is compounded half yearly, then what amount of money will Ram get at the end of the year?

  1. Rs. 22,050

  2. Rs. 22,500

  3. Rs. 25,000

  4. Rs. 25,500

  5. na
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A Correct answer
Explanation

Principal = 20000, Rate = 10% p.a. (5% half-yearly), Time = 1 year (2 periods). Amount = 20000 * (1.05)^2 = 20000 * 1.1025 = 22050.

AI explanation

For a rate of 10% compounded half yearly, the effective rate per half year is 5% and the number of periods is 2. Using the compound interest formula A = P(1 + R/100)^n, the amount becomes 20000(1 + 5/100)^2. This evaluates to 20000 multiplied by 1.1025, which results in Rs. 22,050.

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