Aptitude - Compound Interest - Discussion
Discussion Forum : Compound Interest - General Questions (Q.No. 4)
4.
What is the difference between the compound interests on Rs. 5000 for 1
years at 4% per annum compounded yearly and half-yearly?
years at 4% per annum compounded yearly and half-yearly?
Answer: Option
Explanation:
| C.I. when interest compounded yearly |
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| = Rs. 5304. |
| C.I. when interest is compounded half-yearly |
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| = Rs. 5306.04 |
Difference = Rs. (5306.04 - 5304) = Rs. 2.04
Discussion:
85 comments Page 5 of 9.
S.Naveen said:
6 years ago
I didn't understand this, please explain me.
Aashu patel said:
6 years ago
Short cut method:
Rate given - 4%.
CI for yearly,
4%=1/25(first year).
2%=1/50(6 month)(rate divided by 2).
25:26.
50:51.
1250: 1326 //(25*50)and (26*51).
1250x=5000.
So x = 4,
CI = 1326*4 = 5304.
CI for half-yearly,
2% = 1/50(rate divided by 2).
50:51
50:51
50:51
125000:132651 //(50*50*50) and (51*51*51).
125000x = 5000.
x = 0.04.
So 0.04*132651=5306.04
So difference is 5306.04 - 5304=2.04(answer).
Rate given - 4%.
CI for yearly,
4%=1/25(first year).
2%=1/50(6 month)(rate divided by 2).
25:26.
50:51.
1250: 1326 //(25*50)and (26*51).
1250x=5000.
So x = 4,
CI = 1326*4 = 5304.
CI for half-yearly,
2% = 1/50(rate divided by 2).
50:51
50:51
50:51
125000:132651 //(50*50*50) and (51*51*51).
125000x = 5000.
x = 0.04.
So 0.04*132651=5306.04
So difference is 5306.04 - 5304=2.04(answer).
Gunjan Patidar said:
4 years ago
I too agree the answer is 3.06.
Afsha said:
1 decade ago
Finding it tuff to understand can anyone please make it easy for me from first step.
Simran said:
1 decade ago
How to solve for year and a half when asked in a question please tell me now?
Divya said:
1 decade ago
Compound interest indicates interest on interest.
So we can calculate it as:
CI1 = 5000*(4/100)*1 = 200.
But I don't know to calculate, CI2 for 1/2 year.
Such that compound interest CI = CI1+CI2.
So we can calculate it as:
CI1 = 5000*(4/100)*1 = 200.
But I don't know to calculate, CI2 for 1/2 year.
Such that compound interest CI = CI1+CI2.
Sneh said:
1 decade ago
How we can compound half yearly means I did not understand how 3 can come means n=3 ?
Roop said:
1 decade ago
Why 1/2*4 instead of (1+4/100)^1/2 ?
Roop said:
1 decade ago
@Akshay and @Arslan.
When time is in fraction that is 3/2 then the formula is:
A = P[(1+R/100)*{1+(R/2)/100).
When time is in fraction that is 3/2 then the formula is:
A = P[(1+R/100)*{1+(R/2)/100).
Akshay said:
1 decade ago
Why is is 1+[(1/2)*4/100] when it should be 1+(4/100)^1/2 when the interest is compounded annually.
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