Q:
What is the difference between the compound interests on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?
Answer & Explanation
Answer: A) 2.04
Explanation: C.I. when interest
compounded yearly=rs.[5000*(1+4/100)(1+1/2*4/100)]
= Rs. 5304.
C.I. when interest is
compounded half-yearly=rs.5000(1+2/100)^3
= Rs. 5306.04
Difference = Rs. (5306.04 - 5304) = Rs. 2.04
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