What is the difference (in Rs.) between the interest on Rs.60,000 for one year at 16% per annum compounded half yearly and yearly?
Answer & explanation
Correct answer: option 4
Amount = 60,000
Interest = 16%
If we calculate yearly
Total interest = 16%
If we calculate half yearly
Total interest = 8% + 8% + \(\frac{8×8}{100}\)%
= 16.64%
Difference in interest = 16.64% - 16% = 0.64%
Difference in interest = 60000 × 0.64% = 60000 × \(\frac{0.64}{100}\)
= 60000 × \(\frac{64}{10000}\) = Rs. 384