Maths · Arithmetic and Geometric progressions

What is the, difference between the compound interests on Rs. 5,000 for years at

What is the, difference between the compound interests on Rs. 5,000 for \( 1 \frac{1}{2} \) years at \( 4 \% \) per annum compounded yearly and half-yearly?

  • A. Rs. 2.04
  • B. Rs. 3.06
  • C. Rs. 4.80
  • D. Rs. 8.30

Step-by-step solution

For yearly compounding: Amount = 5000 * (1+0.04) * (1+0.04*0.5) = 5304, CI = 304. For half-yearly compounding: Amount = 5000 * (1+0.02)^3 = 5306.04, CI = 306.04. Difference = 306.04 - 304 = 2.04.
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