Find the compound interest on Rs. 20,000 in 2 years at 4 % per annum, the interest being compounded half-yearly ?

Answer : A. Rs 1648.64…

Find the compound interest on Rs.20,000 in 2years at 4% per annum, the interest being compounded half-yearly ?

A. Rs 1648.64

B. Rs 1596.32

C. Rs 14826.56

D. Rs 11563.99

Answer : A. Rs 1648.64…

Explanation :

Interest is compounded half-yearly, therefore,
Amount = P ( 1 + (R/2) /100 )2n – – – – – – – – – [Interest compounded Half-yearly]

Given :
Principal = Rs. 20000,
Rate = 2 % per half-year,
Time = 2 years = 4 half- years
Amount = 20000 [ 1 + 2 / 100 ]4
Amount = Rs.21648.64
Compound Interest = Total amount – Principal
= 21648.64 – 20000
= Rs. 1648.64

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