Multiple choice

20000 rupees is kept at 18% compound interest rate (compounded annually). If interest is compounded half-yearly, how much more interest (in rupees) will be received?

  1. $486$
  2. $648$
  3. $162$
  4. $324$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Annual compounding: 20000 at 18% for 1 year = 3600 interest. Half-yearly: rate = 9% per half-period, amount after 2 periods = 20000 × 1.09 × 1.09 = 23762. Interest = 3762. Difference = 3762 - 3600 = 162. The half-yearly compounding yields 162 more interest, confirming option C.

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