What is the effective rate of interest corresponding to 12% per annum compounded half-yearly? MCQ with Answer and Explanation
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Question #1
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If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what will be the compound interest on the same sum at the same rate for the same time?
Correct Answer: Option B
Explanation:
Simple Interest for 1 year = 50 / 2 = Rs. 25. Compound interest for 2 years includes the simple interest plus interest on the first year's interest. Extra interest = 5% of 25 = Rs. 1.25. Total compound interest = 50 + 1.25 = Rs. 51.25.
Simple Interest for 1 year = 50 / 2 = Rs. 25. Compound interest for 2 years includes the simple interest plus interest on the first year's interest. Extra interest = 5% of 25 = Rs. 1.25. Total compound interest = 50 + 1.25 = Rs. 51.25.
This question belongs to:
Maths
Compound Interest
Question #2
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The compound interest on Rs. 20000 at 8% per annum for 1 year compounded half-yearly is:
Correct Answer: Option B
Explanation:
Half-yearly rate 4%, n=2. A = 20000 × (1.04)² = 20000 × 1.0816 = 21632, CI = 21632 − 20000 = Rs. 1632.
Half-yearly rate 4%, n=2. A = 20000 × (1.04)² = 20000 × 1.0816 = 21632, CI = 21632 − 20000 = Rs. 1632.
This question belongs to:
Maths
Compound Interest
Question #3
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A sum of money at compound interest becomes Rs. 8820 in 2 years and Rs. 9261 in 3 years. Find the rate.
Correct Answer: Option B
Explanation:
Rate = (9261/8820 − 1) × 100 = (1.05 − 1)×100 = 5%.
Rate = (9261/8820 − 1) × 100 = (1.05 − 1)×100 = 5%.
This question belongs to:
Maths
Compound Interest
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