Compound Interest Ques 14
Question
A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on January 1st and July 1st of a year. At the end of a year, the amount he would have gained by way of interest is how much?
(1) Rs. 120
(2) Rs. 121
(3) Rs. 123
(4) Rs. 122
(5) Rs. 119
(SBI (SO) 2016)
Show Answer
Correct Answer: (2)
Solution: (2)
Amount $ =[ 1600\times {{( 1+\frac{5}{200} )}^{2}}+1600( 1+\frac{5}{200} ) ] $
$ =( 1600\times \frac{41}{40}\times \frac{41}{40}+1600\times \frac{41}{40} ) $
$ =\frac{1600\times 41\times 81}{40\times 40}=Rs.3321 $
$ \therefore $ Compound interest $ =3321-3200=Rs.121 $
BETA
