Multiple choice

The compound interest on Rs 10,000 in $\displaystyle2\frac{1}{2}$ years at 4% per annum is

  1. Rs 1,032

  2. Rs 1,045

  3. Rs 1,100

  4. Rs 1,150
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

CI for 2 years = 10000 * (1.04)^2 - 10000 = 816. For the remaining 1/2 year, interest = (10000 + 816) * 0.04 * 0.5 = 10816 * 0.02 = 216.32. Total CI = 816 + 216.32 = 1032.32, which rounds to 1032.

AI explanation

Using the standard compound interest formula for 2 and a half years, A = P(1 + R/100)^2 * (1 + R/200), the calculation is 10000 * (1.04)^2 * (1.02). This gives 10000 * 1.0816 * 1.02 = 11032.32. Subtracting the principal gives the interest, so the total compound interest is Rs 1,032.

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