Multiple choice

Rs. 4,000 is given at 5% per annum for one year and interest is compounded half yearly. Rs. 2,000 is given at 40% per annum compounded quarterly for 1 year. The total interest received is nearest to:

  1. Rs. 1,333.30

  2. Rs. 1,888.80

  3. Rs. 1,130.70

  4. Rs. 1,444.40
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest 1: 4000 at 5% compounded half-yearly for 1 year (2 periods at 2.5%). A = 4000(1.025)^2 = 4000 * 1.050625 = 4202.5. Interest = 202.5. Interest 2: 2000 at 40% compounded quarterly for 1 year (4 periods at 10%). A = 2000(1.1)^4 = 2000 * 1.4641 = 2928.2. Interest = 928.2. Total interest = 202.5 + 928.2 = 1130.7.

AI explanation

For the first sum using the compound interest formula A = P(1 + R/100)^n with a half-yearly rate of 2.5% and 2 periods, the amount is 4000 multiplied by (1.025)^2, which equals 4202.5. For the second sum compounded quarterly, the rate is 10% and there are 4 periods, so the amount is 2000 multiplied by (1.1)^4, equaling 2928.2. The total interest earned is (4202.5 minus 4000) plus (2928.2 minus 2000), which is 202.5 plus 928.2. The total interest received is Rs. 1130.70.

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