A certain sum invested at 10% per annum compound interest compounded half yearly, amounts to Rs.551.25 at the end of one year. The sum is:
Answer & explanation
Correct answer: option 2
Given rate = 10%
Time = 1 year
( The interest is compounded half yearly then, )
Effective rate will be = 5 + 5 + \(\frac{5 × 5}{100}\) = 10.25%
Amount = Principle + interest = 100% + 10.25% = 110.25%
110.25% = 551.25
100% = 500(Sum)