Multiple choice

Find the difference between compound interest on Rs 1000 of 1.5 years at 20% p.a when interest is compounded annually and half - yearly respectively. ?

  1. 11

  2. 10

  3. 21

  4. 20
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For annual compounding: Amount = 1000(1.2)¹(1.1) = 1320, so CI = 320. For half-yearly: Amount = 1000(1.1)³ = 1331, so CI = 331. The difference is 331 - 320 = 11.

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