Question

A co-operative bank offers 10% compound interest calculated on half-yearly basis. Sham deposits Rs. 2000 each on 1^st July and 1^st January of a year. At the end of the year, the amount he would have gained by way of interest is:

1. Rs. 305
2. Rs. 240
3. Rs. 200
4. Rs. 300

Answer 1

Correct Answer - Option 1 : Rs. 305

Given:

P = 2000

Rate of interest = 10%

Time = 1 year

Formula:

Amount = P(1 + R/200)²ⁿ

Amount = P + CI

Here, P = Principal, R = Rate, CI = Compound interest, n = Time

Calculations:

Amount = 2000 × [1 + (10/2 × 100​)]² + 2000 × [1 + (10/2 × 100​)] 

⇒2000 × 21/20 × 21/20 + 2000 × 21/20

⇒ 2205 + 2100 = 4305

⇒CI = 4305 – (2000 + 2000) = Rs. 305

∴ The amount he would have gained is Rs. 305.