₹20000 is invested on compound interest (compounded half-yearly) at the rate of 20% per annum, then what will be the interest after two years?
Answer & explanation
Correct answer: option 3
Interest is compounded half yearly ,
Rate of interest = \(\frac{20}{2}\)% = 10%
From the formula for compound interest, we know,
C.I = P(1+$\frac{R}{100})^t$– P
= 20000 [ 1 + \(\frac{10}{100}\) ]4 - 20000
= 20000 [ \(\frac{11}{10}\) ]4 - 20000
= 20000 [ \(\frac{ 14641}{10000}\) - 1 ]
= 20000 [ \(\frac{ 4641 }{10000}\) ]
= Rs. 9282