Compound Interest Practice Test 1

Question : 9 of 40

Marks: +1, -0

Find the difference for one year in compound interest on a sum of Rs 880 at 6% p.a. compounded half yearly and annually.

Solution:

Compounded annually
Amount

=880(1+6/100)^1=932.8

CI = 932.8 - 880
CI = 52.8
Compounded half yearly,
Amount

=880(1+6/{2×100})^2=880(103/100)^2

= 933.592
CI = 933.592 - 880 = 53.592
Difference = 53.592 - 52.8 = 0.792

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