Multiple choice

What will be CI on an amount of INR $10000$ at the rate of $20$ p.c.p.a in two years if the interest rate is compounded half yearly?

  1. INR $4525$
  2. INR $4232$
  3. INR $4641$
  4. INR $4461$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 10000, Rate = 20% p.a. compounded half-yearly means 10% per 6 months. Time = 2 years = 4 periods. Amount = 10000 * (1.1)^4 = 10000 * 1.4641 = 14641. CI = 14641 - 10000 = 4641.

AI explanation

Using the half-yearly compound interest formula, the principal is 10000, the rate is 10 percent per half-year, and the time is 4 half-years. The total amount equals 10000 multiplied by 1.10 raised to the power of 4, which is 10000 times 1.4641, or INR 14641. Subtracting the original principal of 10000 yields a compound interest of INR 4641.

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