Multiple choice

Priya invests Rs. 8,000 in a fixed deposit account with an annual interest rate of 12%, compounded half-yearly. How much will her investment be worth after 2 years?

  1. Rs. 9,500

  2. Rs. 9,800

  3. Rs. 10,100

  4. Rs. 10,400

  5. Rs. 10,700
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

P = 8000, r = 12% p.a. = 6% half-yearly, n = 4 periods. A = 8000 * (1.06)^4 = 8000 * 1.262477 = 10099.81, which rounds to 10100.

AI explanation

Apply the compound interest formula: Amount equals Principal times (1 plus Rate divided by 100) raised to the power of n. For half-yearly compounding over 2 years, the rate is halved to 6% and the number of periods n is 4. The calculation is 8000 times 1.06 raised to the power of 4, which results in an approximate final amount of Rs. 10,100.

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