Multiple choice

Anu invested Rs. 15000 at the rate of interest 10% p.a. for one year. If the compound interest is compounded every six months, what amount will Anu get at the end of the year?

  1. Rs. 16537.50

  2. Rs. 16500

  3. Rs. 16525.50

  4. Rs. 18150
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A Correct answer
Explanation

When interest is compounded every 6 months at 10% p.a., the rate per period is 5%. Principal = Rs. 15000. After first 6 months: 15000 × 1.05 = 15750. After second 6 months: 15750 × 1.05 = 16537.50. The formula A = P(1 + r/n)^(nt) where r=0.10, n=2, t=1 gives A = 15000(1 + 0.05)^2 = 15000 × 1.1025 = 16537.50.

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