Multiple choice

Rs.12,500 lent at compound Interest for two years at 10% per annum fetches Rs. ____ more, if the interest was payable half yearly than if it was payable annually -

  1. zero

  2. Rs.10.48

  3. Rs.38.50

  4. Rs.68.82
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Annual interest: 12500 * (1.1^2 - 1) = 12500 * 0.21 = 2625. Half-yearly interest: 12500 * (1.05^4 - 1) = 12500 * (1.21550625 - 1) = 2693.828. Difference = 2693.828 - 2625 = 68.828.

AI explanation

The amount if interest is payable annually is 12500 times 1.10 squared, which equals Rs. 15125. If interest is payable half yearly, the rate becomes 5 percent per period and the amount is 12500 times 1.05 to the power of 4, equaling Rs. 15193.82. The difference between these two amounts is 15193.82 minus 15125, which is Rs. 68.82.

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