What is the compound interest on ₹80,000 for 1 year at 10 per cent per annum, compounded half yearly?
Answer & explanation
Correct answer: option 2
Interest is compounded half - yearly .
Actual interest = \(\frac{10}{2}\)% = 5%
From the formula for compound interest, we know,
C.I = P(1+$\frac{R}{100})^t$– P
= 80000 [ 1 + \(\frac{5}{100}\) ]² - 80000
= 80000 [ \(\frac{21}{20}\) × \(\frac{21}{20}\) - 1 ]
= 80000 [ \(\frac{41}{400}\) ]
= Rs. 8200