Multiple choice

What will be the compound interest (in Rs) on a sum of Rs 7,200 for 18 months at a rate of 20% per annum, if the interest is compounded half-yearly (nearest to an integer)?

  1. 2,833

  2. 2,383

  3. 3,238

  4. 2,338
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

18 months = 3 half-year periods at 10% each. A = 7200 * 1.1³ = 7200 * 1.331 = 9583.20. CI = 9583.20 - 7200 = 2383.20, rounding to Rs 2383. Remember to adjust rate for compounding period.

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