Compound Interest Practice Test 3

Question : 6 of 40

Marks: +1, -0

What is the difference in compound interest on a sum of Rs 15,000 at 10% for one year when the interest is compounded annually and half yearly.

Solution:

Compounded annually.
Amount

= 15,000 (1+10/ 100)^t

Amount

= 15,000 ×11/10

Amount = Rs 16,500
CI = 16,500 - 15,000
CI = Rs 1,500
Compounded half yearly,
Amount

=15000(1+10/{2×100})^2

Amount = 16,537.5
CI = 16,537.5 - 15,000 = Rs 1,537.5
Difference = 1,537.5 - 1,500 = Rs 37.5

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