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Question 1:
What is the difference between the compound interests on Rs. 5000 for 11/2 years at 4% per annum compounded yearly and half-yearly? A. Rs. 2.04
Feedback Amount after 11/2 years when interest is compounded yearly
=5000×(1+4/100)^1×(1+(1/2×4)/100)
= 5000×104/100× (1+2/100)
=5000×104/100×102/100
=50×104×51/50
=104×51=Rs. 5304
Compound Interest for 1 1/2 years when interest is compounded yearly = Rs.(5304 - 5000)
Amount after 11/2 years when interest is compounded half-yearly
=P(1+(R/2)/100)^2T=5000(1+(4/2)/100)^2×32
=5000(1+2/100)3
=5000(102/100)3
=5000(102/100)(102/100)(102/100)
=50×102×51/50×51/50=102×51×51/50=51×51×51/25=Rs. 5306.04
Compound Interest for 1 1/2 years when interest is compounded half-yearly = Rs.(5306.04 - 5000)
Difference in the compound interests = (5306.04 - 5000) - (5304 - 5000) = 5306.04 - 5304 = Rs. 2.04
=5000×(1+4/100)^1×(1+(1/2×4)/100)
= 5000×104/100× (1+2/100)
=5000×104/100×102/100
=50×104×51/50
=104×51=Rs. 5304
Compound Interest for 1 1/2 years when interest is compounded yearly = Rs.(5304 - 5000)
Amount after 11/2 years when interest is compounded half-yearly
=P(1+(R/2)/100)^2T=5000(1+(4/2)/100)^2×32
=5000(1+2/100)3
=5000(102/100)3
=5000(102/100)(102/100)(102/100)
=50×102×51/50×51/50=102×51×51/50=51×51×51/25=Rs. 5306.04
Compound Interest for 1 1/2 years when interest is compounded half-yearly = Rs.(5306.04 - 5000)
Difference in the compound interests = (5306.04 - 5000) - (5304 - 5000) = 5306.04 - 5304 = Rs. 2.04
B. Rs. 4.80
C. Rs. 3.06
D. Rs. 8.30
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