IndiaBIX

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 4 of 9.
Praveen Kumar C said:   8 years ago
Actually, the correct answer is 3.06.
Preethu said:   8 years ago
What formula are they using for calculating C.I annually?
King said:   8 years ago
The correct answer is 3.06.
Maggi said:   8 years ago
Yes, correct @Saikumar.

4% yearly given in ques. For half year 4/2 =2%.
Mona said:   3 years ago
Can someone please explain the calculation of C.I for yearly basis? I am not getting this.
Krishna said:   7 years ago
If compound interest is calculated in yearly then compound interest is 302.98 i.e 303.

Compound interest=5000[(1+4/100)^1.5-1].
=302.98 i.e 303.
So, the calculation of compound interest in yearly is wrong.
Vinay said:   7 years ago
The correct answer is 3.06.
Dheeraj kumar said:   7 years ago
When compounded half yearly there is 3 half year will be formed then it must be divided in rate also i.e. 4/3 and then we apply the power as 3. Can anyone please help?
Nikhil said:   4 years ago
We can do the same thing for both C.I.

We don't need to do extra stuff like 3/2 and all just try I got my answer correctly without using this method.
Ronak soni said:   9 years ago
(1+2/100)^3 in this, why this cube is taken in half yearly?
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