A sum of Rs.50,000.00 is invested in a bank deposit for 1 year at an interest…
2020
A sum of Rs.50,000.00 is invested in a bank deposit for 1 year at an interest rate of 10% per annum, compounded on a half-yearly basis. What is the amount of interest at the end of 1 year?
- A.
5125
- B.
5250
- C.
5500
- D.
5150
Attempted by 3 students.
Show answer & explanation
Correct answer: A
Compounded half-yearly means the rate is 5% per half-year and there are 2 compounding periods.
Amount = 50000 x (1.05)^2 = 55125.
Interest = 55125 - 50000 = 5125.