Interest for one and a half years — Aptitude Question
Interest for one and a half years: What is the amount on ₹8,000 at 10% per annum compound interest for 1½ years,… Answer and worked solution on CodeKairo.
- Topic: Simple & Compound Interest
- Section: Quantitative Aptitude
- Difficulty: Hard
- Time target: 90 seconds
Question
What is the amount on ₹8,000 at 10% per annum compound interest for 1½ years, compounded half-yearly?
Options
- ₹9,000
- ₹9,261
- ₹9,300
- ₹9,400
Show the answer and the worked solution
Correct answer: B. ₹9,261
Worked solution
- Rate per half-year = 5%; periods = 3.
- 1.05³ = 1.157625.
- Amount = 8,000 × 1.157625 = ₹9,261.
Answer: ₹9,261.
The idea
Count the compounding periods rather than the years. One and a half years compounded half-yearly is three periods, not one and a half.
Shortcut. 5% for three periods on 8,000 is 8,000 × (21/20)³, and since 8,000 = 20³ that is 21³ = ₹9,261.
Common trap. ₹9,300 is the tempting round figure just above the simple-interest ₹9,200; half-yearly compounding adds only ₹61 over simple interest here, landing on ₹9,261.
All Simple & Compound Interest questions · placement mock tests