question_answer

A sum of money yields Rs. 300 as compound interest for second year of 10% half yearly. Find the sum while interest compounded annually.               

A)  \[Rs.1520\]                   

B)  \[Rs.1025\]             

C)  \[Rs.1250\]                   

D)  \[Rs.1500\]

Correct Answer: C

Solution :

 Half yearly interest rate = 10% (Given) then, yearly interest rate = 20% rate \[=20%=\frac{1}{5}\] Using this, for 2 years First year interest = 5U 2nd year interest = 6U Where given, 6U = 300 \[1U=\frac{300}{6}=50\] The value of \[25U=50\times 25=\,\underline{\mathbf{Rs}\mathbf{.}\,\mathbf{1250}}\]