Question 11

If the interest is compounded half-yearly, then what will be the compound interest (in Rs) on a sum of Rs 10000 for 1 year at the rate of 10% per annum?

Solution

Principal sum = Rs. 10,000

Rate of interest = 10% and time period = 1 year

Compound interest compounded half yearly = $$P[(1+\frac{R}{200})^{2T}-1]$$

= $$10,000[(1+\frac{10}{200})^2-1]$$

= $$10,000[(\frac{21}{20})^2-1]$$

= $$10,000(\frac{441-400}{400})$$

= $$10,000\times\frac{41}{400}$$

= $$25\times41=Rs.$$ $$1025$$

=> Ans - (D)

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