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What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?
- a)Rs. 2.04
- b)Rs. 3.06
- c)Rs. 4.80
- d)Rs. 8.30
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
What is the difference between the compound interests on Rs. 5000 for ...
C.I. when interest compounded yearly
= Rs. [ 5000 x (1 + 4/100) x {1 + (1/2 x 4)/ 100}]
= Rs. 5000 x 26/25 x 51/50
= Rs. 5304.
and, C.I. when interest is compounded half-yearly
= Rs.5000 x (1 + 2 /100) ^3.
= Rs. 5000 x 51/50 x 51/50 x 51/50.
= Rs. 5306.04
The required Difference = Rs. (5306.04 - 5304) = Rs. 2.04.
= Rs. [ 5000 x (1 + 4/100) x {1 + (1/2 x 4)/ 100}]
= Rs. 5000 x 26/25 x 51/50
= Rs. 5304.
and, C.I. when interest is compounded half-yearly
= Rs.5000 x (1 + 2 /100) ^3.
= Rs. 5000 x 51/50 x 51/50 x 51/50.
= Rs. 5306.04
The required Difference = Rs. (5306.04 - 5304) = Rs. 2.04.
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Community Answer
What is the difference between the compound interests on Rs. 5000 for ...
Calculation of Compound Interest:
Compound Interest formula: A = P(1 + r/n)^(nt)
Where,
A = Total amount after n years
P = Principal amount (Rs. 5000 in this case)
r = Annual interest rate (4%)
n = Number of times interest is compounded per year
t = Number of years (1 year in this case)
When interest is compounded yearly:
A = 5000(1 + 0.04/1)^(1*1)
A = 5000(1.04)
A = Rs. 5200
Compound Interest = Total amount - Principal amount
Compound Interest = Rs. 5200 - Rs. 5000
Compound Interest = Rs. 200
When interest is compounded half-yearly:
n = 2 (compounded half-yearly)
r = 4% per annum
A = 5000(1 + 0.04/2)^(2*1)
A = 5000(1 + 0.02)^2
A = 5000(1.02)^2
A = 5000(1.0404)
A = Rs. 5202
Compound Interest = Total amount - Principal amount
Compound Interest = Rs. 5202 - Rs. 5000
Compound Interest = Rs. 202
Difference in Compound Interests:
The difference between compound interests when interest is compounded yearly and half-yearly:
Rs. 202 - Rs. 200 = Rs. 2.04
Therefore, the correct answer is option A) Rs. 2.04.
Compound Interest formula: A = P(1 + r/n)^(nt)
Where,
A = Total amount after n years
P = Principal amount (Rs. 5000 in this case)
r = Annual interest rate (4%)
n = Number of times interest is compounded per year
t = Number of years (1 year in this case)
When interest is compounded yearly:
A = 5000(1 + 0.04/1)^(1*1)
A = 5000(1.04)
A = Rs. 5200
Compound Interest = Total amount - Principal amount
Compound Interest = Rs. 5200 - Rs. 5000
Compound Interest = Rs. 200
When interest is compounded half-yearly:
n = 2 (compounded half-yearly)
r = 4% per annum
A = 5000(1 + 0.04/2)^(2*1)
A = 5000(1 + 0.02)^2
A = 5000(1.02)^2
A = 5000(1.0404)
A = Rs. 5202
Compound Interest = Total amount - Principal amount
Compound Interest = Rs. 5202 - Rs. 5000
Compound Interest = Rs. 202
Difference in Compound Interests:
The difference between compound interests when interest is compounded yearly and half-yearly:
Rs. 202 - Rs. 200 = Rs. 2.04
Therefore, the correct answer is option A) Rs. 2.04.
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What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?a)Rs. 2.04b)Rs. 3.06c)Rs. 4.80d)Rs. 8.30Correct answer is option 'A'. Can you explain this answer?
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What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?a)Rs. 2.04b)Rs. 3.06c)Rs. 4.80d)Rs. 8.30Correct answer is option 'A'. Can you explain this answer? for Interview Preparation 2024 is part of Interview Preparation preparation. The Question and answers have been prepared according to the Interview Preparation exam syllabus. Information about What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?a)Rs. 2.04b)Rs. 3.06c)Rs. 4.80d)Rs. 8.30Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Interview Preparation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?a)Rs. 2.04b)Rs. 3.06c)Rs. 4.80d)Rs. 8.30Correct answer is option 'A'. Can you explain this answer?.
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