Multiple choice

The simple interest on a certain sum for 3 years at 12% p.a. is Rs.6,750. What is the compound interest (in Rs.) on the same sum for 2 years at 20% p.a., if interest is compounded half-yearly? (rounded off to the nearest Rs.)

  1. 7,729

  2. 8,702

  3. 8,000

  4. 7858
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

SI = P×R×T/100, so 6750 = P×12×3/100, giving P = 18750. For CI: P = 18750, R = 20% p.a. = 10% half-yearly, T = 2 years = 4 half-years. CI = 18750[(1 + 10/100)^4 - 1] = 18750[1.4641 - 1] = 18750 × 0.4641 = 8701.875 ≈ 8702.

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