A invested Rs 14400 for 3 years at 10% per annum simple interest. If he invested the same amount for 1.5 years when interest rate is same but compounded half yearly. Find the difference between the interests.
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$2050.2$
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$2250.0$
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$1872.2$
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$2150.0$
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None of these
A
Correct answer
Explanation
SI = 14400 x 0.1 x 3 = Rs 4320. For CI: rate 10% compounded half-yearly means 5% per period for 3 periods in 1.5 years. CI = 14400[(1 + 0.05)^3 - 1] = 14400[1.157625 - 1] = Rs 2269.8. Difference = 4320 - 2269.8 = Rs 2050.2. Half-yearly compounding increases periods but reduces rate per period.