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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 6 of 9.
Priya said:   9 years ago
@Rajjan.

How you got this? Please explain.
Krishna said:   8 years ago
The right ans = 3.06.

I agree @Stephen.
Sangeetha said:   8 years ago
Correct answer is 3.06.

When the interest is calculated annually, we cannot assume the interest for a half year to be 2%.
Hence C.I for 1.5 years should be calculated with n=3/2 and not R=r/2.

C.I (annually) - C.I (half-yearly) = 5306.04-5302.98 - 3.06.
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?
Vinay said:   8 years ago
The exact ans is as follows,

Formula for CI = A - P.
A - AMOUNT,
P - Principle 1/2*4 = 2.
= (5000*(1+4/100)^1*(1+2/100)= 5304,
Then for only half year 5000*(1+2/100) = 5100,
Difference = 5304-5100 = 204 finally u divide by 100 I will get 2.04.
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%.
Sibatosh mahata said:   8 years ago
2.04 is the right answer.
(1)
INDHU said:   8 years ago
If calculated for half year we should take rate/200 right?

Then why rate/100 is taken?
(1)
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