Multiple choice

What is the difference between the amount of interest received by a man, If he invested as following: (a) Rs. 18,000 at 20% p.a. for 2 years, interest compounded annually. (b) Rs. 22,000 at 10% p.a. for one and half years, interest compounded half yearly.

  1. Rs. 3,978.23

  2. Rs. 4,452.25

  3. Rs. 5,452.25

  4. Rs. 7,832.25

  5. Rs. 8,609.45
Reveal answer Fill a bubble to check yourself
B Correct answer
AI explanation

For the first investment, the compound interest is 18000 * (1.2)^2 - 18000 = 18000 * 1.44 - 18000 = 7920. For the second investment compounded half-yearly, the interest is 22000 * (1.05)^3 - 22000 = 22000 * 1.157625 - 22000 = 3467.75. The difference between the two interests is 7920 - 3467.75 = 4452.25.

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