Compound Interest Practice Test 4

Question : 2 of 40

Marks: +1, -0

What is the difference between the compound interests on Rs. 5000 for

1 1/2

years at 4% p.a. compounded yearly and half yearly?

Solution:

Ist C.I.

=5000(1+4/100)(1+4/{2×100})

=5000×26/25×51/50

= Rs. 5304
IInd C.I.

=5000(1+2/100)^3

=5000×(51/50)^3=5306.04

Hence, required difference = 5306.04 – 5304 = Rs. 2.04

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