Multiple choice

Compute the compound interest on Rs. $4,000$ for $1^{1_{/2}}$ years at $10\%$ p.a. compounded half-yearly.

  1. $16,000$
  2. $630.50$
  3. $425.76$
  4. $1,640$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 4000, Rate = 10% p.a. compounded half-yearly (5% per half-year), Time = 1.5 years (3 half-years). Amount = 4000 * (1 + 0.05)^3 = 4000 * 1.157625 = 4630.50. Interest = 4630.50 - 4000 = 630.50.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n for half-yearly compounding, the rate becomes 5% and the time becomes 3 half-years. The amount is 4000(1 + 5/100)^3 = 4000(21/20)^3 = 4630.50. The compound interest is the amount minus the principal, which is 4630.50 - 4000 = 630.50. The result is Rs. 630.50.

Keep practicing — related questions