Multiple choice

If Rs. 1000 is invested at 12% interest and the interest is compunded half-yearly. what will be total amount at the end of one year.

  1. Rs. 1120.00

  2. Rs. 1123.60

  3. Rs. 1126.20

  4. Rs. 1134.40
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For half-yearly compounding at 12% annual rate, we use the formula A = P(1 + r/2n)^2 where n=2. The half-yearly rate is 6%, so A = 1000 × (1.06)^2 = 1000 × 1.1236 = Rs. 1123.60. Option A assumes simple annual compounding, while C and D are calculation errors.

Keep practicing — related questions