Multiple choice

Find the compound interest of $ 500$ for $1$ year, compounded semi-annually at the rate of $3$ $\%$ per six months.

  1. $20.50$
  2. $10.45$
  3. $30.45$
  4. $42.89$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 500, Rate = 3% per 6 months, Time = 1 year (2 periods). Amount = 500 * (1 + 3/100)^2 = 500 * (1.03)^2 = 500 * 1.0609 = 530.45. Compound Interest = 530.45 - 500 = 30.45.

AI explanation

Using the compound interest formula Amount = P x (1 + R/100)^n, the principal is 500, the rate is 3 percent per half-year, and there are 2 half-year periods in one year. The amount evaluates to 500 x (1.03)^2, which equals 530.45 rupees. Subtracting the principal of 500 from this amount yields a compound interest of 30.45 rupees.

Keep practicing — related questions