Q11 of 89 Page 14

Rakesh lent out Rs. 10000 for 2 years at 20% per annum, compounded annually. How much more he could earn if the interest be compounded half-yearly?

Given,


Principal = Rs.10000


Rate = 20%


Time = 2 year


Hence,


Compound interest =


=


If interest compounded half yearly ,


Rate =


Time = 2×2 = 4 half years


Hence,


Compound interest =


= 10000


So,


If Rakesh can earn = Rs.(4641 – 4400 ) = Rs.241 more


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