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Discussion :: Compound Interest

  1. A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:

    2. A.

    Rs. 120
    B.

    Rs. 121
    C.

    Rs. 122
    D.

    Rs. 123

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    Answer : Option B

    Explanation :

    Amount=Rs.1600*\( [1+\frac { 5 } { 2*100 }]^2\)+1600*\( [1+\frac { 5 } { 2*100 }]\)

               

                           =Rs.[1600\( *\frac { 41 } { 40 }\)\( *\frac { 41 } { 40 }\)+1600\( *\frac { 41 } { 40 }\)]

               

                          =RS.[1600\( *\frac { 41 } { 40 }\)(\( \frac { 41 } { 40 }\)+1)]                 

                   

                          =Rs.[\( [\frac { 1600*41*81 } { 40*40 }]\)

                       

                         Rs.3321

         
     C.I. = Rs. (3321 - 3200) = Rs. 12
     

     

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