New Enroll in our GIC Finance Online Course Here!

    Register

    Question

    P invests Rs. 5,500 on compound interest at 16% p.a.

    (compounded semiannually) for 1 year. Find the interest earned by 'P'.
    A Rs.755 Correct Answer Incorrect Answer
    B Rs.650.20 Correct Answer Incorrect Answer
    C Rs.655.20 Correct Answer Incorrect Answer
    D Rs.600 Correct Answer Incorrect Answer

    Solution

    ATQ, Effective time = 2 × 1 = 2 terms Effective rate of interest = 16 × (1/2) = 8% Or, compound interest = 5,500 × (1.08)2 - 5,760 Or, compound interest = 6,415.2 - 5,760 = Rs. 655.20

    Practice Next