If 10 percent per annum rate of compound interest compounded yearly is equivalent to the x percent per annum rate of compound interest compounded half yearly, then what is the value (Approximate) of x ?
Answer & explanation
Correct answer: option 3
Rate 1 = 10%
Rate x% is compounded half yearly ,
So , Compound interest of 1 year = x + x + \(\frac{ x × x }{100}\)
= 2x + \(\frac{ x² }{100}\)
ATQ,
2x + \(\frac{ x² }{100}\) = 10
200x + x² = 1000
By solving ,
x = 4.88%