What will be the compound interest (in ₹) on a s11m of ₹7,200 for 18 months at a rate of 20% per annum. if the interest is compounded half-yearly (nearest to an integer)?
Answer & explanation
Correct answer: option 4
As interest is compounded half - yearly . So, effective annual rate = 10%
Amount = P$(1 \;+\; \frac{R}{100})^t$
= 7200( 1 + \(\frac{10}{100}\) )³
= 7200 × \(\frac{11}{10}\) × \(\frac{11}{10}\) × \(\frac{11}{10}\)
= 9583.2
So, Compound interest = 9583.2 - 7200
= 2383.2
= 2383 ( approx )