Multiple choice

What is the interest on Rs. 2,000 for 11/2 years at 10% rate of interest per annum, the interest being compounded every six months?

  1. Rs. 325

  2. Rs. 300

  3. Rs. 305.25

  4. Rs. 315.25
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 1.5 years at 10% compounded half-yearly, the rate is 5% per half-year for 3 periods. The amount is 2000 * (1 + 0.05)^3 = 2000 * 1.157625 = 2315.25. The interest is 2315.25 - 2000 = 315.25.

AI explanation

Using the formula for compound interest when interest is compounded half-yearly, we calculate the amount as Principal multiplied by (1 plus Rate divided by 200) raised to the power of (2 multiplied by Time). The rate per half-year becomes 5 percent and the number of periods is 3, making the calculation 2000 multiplied by (1.05) cubed. This provides an amount of 2315.25, and subtracting the principal of 2000 gives the compound interest of Rs. 315.25.

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