Question

In what time will Rs. 25000 amount to Rs. 26530.20 @ 4% compound interest payable half-yearly? 

A 3 years Correct Answer Incorrect Answer
B 1 year 5 months Correct Answer Incorrect Answer
C 1 year 6 months Correct Answer Incorrect Answer
D Data inadequate Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

T = 3/2    years;  Since interest is compounded half-yearly, R =  4/2  = 2% p.a. and T = 2t years A = P  [1+ (R/100) ]t ⇒  26,530.20 = 25,000 [1+ (2/100) ]2t ⇒ (26530.20/25000)   = (102/100) 2t ⇒ (132651/125000)  = (102/100) 2t ⇒  (51/50) = (51/50) 2t ⇒  2t = 3 yrs ⇒  t = 3/2  years = 1 year and 6 months

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