Multiple choice

A sum of Rs.30000 is invested for 18 months at 20% per annum on compound interest. If the interest is compounded half yearly. Then find the how much interest to be paid?

  1. Rs.9930

  2. Rs.9940

  3. Rs.9830

  4. Can't be determined

  5. None of these
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A Correct answer
Explanation

Principal = Rs. 30000, Rate = 20% p.a., Time = 18 months = 1.5 years. Half-yearly compounding means 3 periods at 10% per period. Amount = 30000 × (1.10)^3 = 30000 × 1.331 = Rs. 39930. Interest = 39930 - 30000 = Rs. 9930.

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