What is the difference between the compound interests on ₹ 1000 for 1 year at 10% per annum when compounded yearly and when compounded half yearly?

₹ 2.50

Amount = Principal × ( 1+ ( \(\frac{r}{ 100 }\) )ⁿ

Compound interest compounded annualy,

Interest Compounded annually= 1000 × ( 1+ ( \(\frac{10}{ 100 }\) )1 - 1 )

= 1000 × 0.1

= 100

Compound interest compounded half yearly,

Compound interest = 1000 × ( 1+ ( \(\frac{10}{ 200 }\) )² - 1 )

= 1000 ×0.1025

= 102.5

Required difference = 102.5 - 100

= 2.5

The correct answer is Option (3) → ₹ 2.50