Multiple choice

Calculate compound interest for Rs $20,000$ for $1$ year at $16$% compounded semi-annually.

  1. Rs.$3172$
  2. Rs.$3328$
  3. Rs.$3611$
  4. Rs.$3752$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 20000, Rate = 16% per annum, semi-annual rate = 8%, time = 1 year (2 periods). Amount = 20000 * (1.08)^2 = 20000 * 1.1664 = 23328. Interest = 23328 - 20000 = 3328.

AI explanation

Using the compound interest formula Amount = P x (1 + R/100)^n with a principal of 20000 rupees, a rate of 8 percent per half-year, and 2 time periods, the amount becomes 20000 x (1.08)^2, which equals 23328 rupees. Subtracting the principal of 20000 from this amount gives the compound interest of 3328 rupees.

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