Multiple choice

Find the compound interest for Rs. $7000$ for a period $3$ years, compounded semi-annually at the rate of $4\%$ per six months.

  1. $1857.23$
  2. $2857.23$
  3. $3857.23$
  4. $14457.23$
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A Correct answer
Explanation

Principal = 7000, rate = 4% per 6 months, time = 3 years (6 periods). Amount = 7000 * (1 + 0.04)^6 = 7000 * 1.265319 = 8857.23. Compound Interest = 8857.23 - 7000 = 1857.23.

AI explanation

Using the compound interest formula Amount = P x (1 + R/100)^n, the principal is 7000, the rate is 4 percent per half-year, and the total number of half-year periods in 3 years is 6. The amount evaluates to 7000 x (1.04)^6, which equals 8857.23 rupees. Subtracting the original principal of 7000 from this accumulated amount gives the compound interest of 1857.23 rupees.

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