Find the compound interest on ₹35,000 in 2 years at 6% per annum, the interest being compounded half-yearly (nearest to a ₹):
Answer & explanation
Correct answer: option 3
Interest is compounded Half - yearly,
So, Actual rate of interest = \(\frac{6}{2}\)% = 3%
From the formula for compound interest, we know,
C.I = P(1+$\frac{R}{100})^t$– P
= 35000 [ 1 + \(\frac{3}{100}\) ]4 - 35000
= 35000 × \(\frac{103}{100}\)× \(\frac{103}{100}\)× \(\frac{103}{100}\)× \(\frac{103}{100}\) - 35000
= 39392.8 - 35000
= 4392.8
= 4393 ( nearest Rs. )