Question

Find Compound interest earned in 1 year on a sum of Rs 25,000 at 20% per annum compounded semi - annually.

• A. Rs. 5200
• B. Rs. 5250
• C. Rs. 5240
• D. Rs. 5450

Answer 1

Answer:

B. Rs. 5250

$A = P \left(1 + \frac{R}{100}\right)^{t}$

Since compounded semi annually[half yearly]

R=R/2 and t = 2t

Here ,

R = 20/2 = 10%, t = 2t = 2

$A = 25000 \left(1 + \frac{10}{100}\right)^{2}$

$A = 25000 \left(1 + 0.10\right)^{2}$

$A = 25000 (1.10)^{2}$

$A = 25000 \times 1.21$

$\mathbf{A = Rs 30,250}$

$\text{CI} = A - P$

$\text{CI} = 30250 - 25000$

$\mathbf{CI = Rs 5,250}$