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    Question

    Find the compound interest earned on Rs. 35000 at 11% per

    annum, compounded half yearly, after 1 year.
    A Rs.1844.50 Correct Answer Incorrect Answer
    B Rs.2264 Correct Answer Incorrect Answer
    C Rs.3961.63 Correct Answer Incorrect Answer
    D Rs.3040 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Effective rate of interest = 11 × (6/12) = 5.5%

    Effective time or number of terms = 2 half years

    Or, amount received = 35000 × {1 + (5.5/100)}² = 35000 × (105.5/100) × (105.5/100) = Rs. 38961.63

    Therefore, interest received = 38961.63 - 35000 = Rs. 3961.63

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