Multiple choice

A bank pays 10% rate of interest, interest being calculated half yearly. A sum of Rs 400 is deposited in the bank. The amount at the end of 1 year will be

  1. Rs 440

  2. Rs 439

  3. Rs 441

  4. Rs 442
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For half-yearly compounding, the rate is 5% per half-year and the time is 2 half-years. Amount = 400 * (1 + 0.05)^2 = 400 * 1.1025 = 441.

AI explanation

Using the compound interest formula for half yearly compounding, the new rate is 5 percent per half year and the time is 2 half years. The amount equals 400 multiplied by 1.05 squared, which equals 400 multiplied by 1.1025. The final amount at the end of the year is Rs 441.

Keep practicing — related questions