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Multiple choice

The compound interest on Rs.12,000 in 2 years at 4% per annum, the interest being compound half yearly is -

  1. Rs.989.18

  2. Rs.987.18

  3. Rs.899.18

  4. Rs.789.18

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Half-yearly compounding means rate = 4%/2 = 2% per half-year, periods = 2×2 = 4. Amount = 12000(1+0.02)⁴ = 12000(1.08243) = Rs.12989.18. CI = 12989.18 - 12000 = Rs.989.18.

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