Discussion
A certain sum amounts to ₹7,535 in 5 years at 7.4 % p.a. at simple interest. What will be amount (in ₹) of the same sum in one year at 20% p.a., if the interest is compounded half yearly?
Answer: C
The amount is 6,655. At simple interest of 7.4 % for 5 years, the amount is the principal times 1 + 0.37 = 1.37.
\[ P = \frac{7535}{1.37} = 5500 \]
For one year at 20 % compounded half-yearly, the rate is 10 % for each of two half-years.
\[ A = 5500 \times (1.1)^2 = 5500 \times 1.21 = 6655 \]
The options 6,413, 6,534 and 7,920 do not equal 5500 times 1.21, so the third option is the answer. As a check, the interest in 5 years is 37 % of 5500, which is 2035, and 5500 + 2035 = 7535, the amount given in the question.
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development