A sum of Rs. 500 is invested on compound interest at 20% per annum for

1.	A sum of Rs. 500 is invested on compound interest at 20% per annum for a year. Find the amount of interest earned if the interest is compounded half-yearly.1. Rs. 842. Rs. 1253. Rs. 1204. Rs. 105
Answer» Correct Answer - Option 4 : Rs. 105 GIVEN: Principal = Rs. 500, R = 20% and T = 1 CONCEPT: When interest is compounded half-yearly: Time = 1 × 2 = 2 Rate = 20/2 = 10% FORMULA USED: A = P × [1 + R/100]^T CALCULATION: Applying the formula: A = 500 × [1 + 10/100]² = 500 × 1.21 = 605 Hence, Interest = 605 - 500 = Rs. 105

A sum of Rs. 500 is invested on compound interest at 20% per annum for a year. Find the amount of interest earned if the interest is compounded half-yearly.1. Rs. 842. Rs. 1253. Rs. 1204. Rs. 105

Answer» Correct Answer - Option 4 : Rs. 105

GIVEN:

Principal = Rs. 500, R = 20% and T = 1

CONCEPT:

When interest is compounded half-yearly:

Time = 1 × 2 = 2

Rate = 20/2 = 10%

FORMULA USED:

A = P × [1 + R/100]^T

CALCULATION:

Applying the formula:

A = 500 × [1 + 10/100]²

= 500 × 1.21

= 605

Hence,

Interest = 605 - 500 = Rs. 105

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