Q:
What is the difference between the compound interests on Rs. 5000 for 11⁄2 years at 4% per annum compounded yearly and half-yearly?
Answer & Explanation
Answer: B) Rs. 2.04
Explanation: Compound Interest for 1 1⁄2 years when interest is compounded yearly = Rs.(5304 - 5000)
Amount after 11⁄2 years when interest is compounded half-yearly
Compound Interest for 1 1⁄2 years when interest is compounded half-yearly = Rs.(5306.04 - 5000)
Difference in the compound interests = (5306.04 - 5000) - (5304 - 5000)= 5306.04 - 5304 = Rs. 2.04
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