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Aptitude - Compound Interest - Discussion

Discussion Forum : Compound Interest - General Questions (Q.No. 4)
Compound Interest
4.
What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?
Rs. 2.04
Rs. 3.06
Rs. 4.80
Rs. 8.30
Answer: Option
Explanation:

C.I. when interest
compounded yearly    
= Rs. 5000 x 1 + 4 x 1 + x 4
100 100
= Rs. 5000 x 26 x 51
25 50
= Rs. 5304.

C.I. when interest is
compounded half-yearly
= Rs. 5000 x 1 + 2 3
100
= Rs. 5000 x 51 x 51 x 51
50 50 50
= Rs. 5306.04

Difference = Rs. (5306.04 - 5304) = Rs. 2.04

Discussion:
85 comments Page 3 of 9.
SIMBIRO LELISA said:   3 years ago
Very good explanation, Thank you.
(1)
Ronak soni said:   9 years ago
(1+2/100)^3 in this, why this cube is taken in half yearly?
Deepak said:   9 years ago
How to decide 4% rate?
ASHRAF said:   9 years ago
@Saikumar.

Why 2% taken?
Mahalakshmi said:   9 years ago
What is compound interest formula?

First describe it for me.
Rajjan khan said:   9 years ago
Best way.

Reffective for yearly = 6.08%,
Reffective for half yearly = 6.1208,
Difference = .0408%,

5000 *.0408/100 = 2.04.
Rajjan khan said:   9 years ago
Best way.

Reffective for yearly = 6.08%,
Reffective for half yearly = 6.1208,
Difference = .0408%,

5000 *.0408/100 = 2.04.
NEERAJ said:   9 years ago
Yes @Stephen.

I too think the option (b) is the answer.
Priya said:   9 years ago
@Rajjan.

How you got this? Please explain.
Krishna said:   9 years ago
The right ans = 3.06.

I agree @Stephen.
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