A sum of Rs. 50,000 is invested in a bank deposit for 1 year at an interest rate of 10% per annum,…
With half yearly compounding the rate per half year is 5 per cent for 2 periods, so the amount is \(50000\times(1.05)^2=55125\). The interest is \(55125-50000=5125\).
Choose your answer
A sum of Rs. 50,000 is invested in a bank deposit for 1 year at an interest rate of 10% per annum, compounded on a half-yearly basis. What is the amount of interest at the end of 1 year?
Answer and explanation
Correct answer A
With half yearly compounding the rate per half year is 5 per cent for 2 periods, so the amount is . The interest is .
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