What is the difference between the C.I. on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?
Answer: A
C.I. when interest is compounded yearly
= [5000 * (1 + 4/100) * (1 + (1/2 * 4)/100]
= 5000 * 26/25 * 51/50 = Rs. 5304
C.I. when interest is compounded half-yearly
= [5000 * (1 + 2/100)⊃2;]
= (5000 * 51/50 * 51/50 * 51/50) = Rs. 5306.04 Difference = (5306.04 - 5304) = Rs. 2.04