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    Question

    Sara deposited Rs. 18,000 into an investment that offers

    a compound interest rate of 20% per annum, with semi-annual compounding. Calculate the interest accrued by Sara after one and a half years.
    A Rs.5,000 Correct Answer Incorrect Answer
    B Rs.5,900 Correct Answer Incorrect Answer
    C Rs.5,950 Correct Answer Incorrect Answer
    D Rs.5,958 Correct Answer Incorrect Answer
    E none of these Correct Answer Incorrect Answer

    Solution

    ATQ, Interest earned by Sara =18000 × {(1 + 0.20/2)(1.5×2) – 1} = 18000 × {1.331 – 1}  = 18000 × 0.331  = Rs. 5,958

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