A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:
Options:
A . Rs 120
B . Rs 121
C . Rs 122
D . Rs 123
E . None of these
Answer: Option B - Amount = Rs. [ 1600 x ( 1 + 5 ) 2 + 1600 x ( 1 + 5 ) ] 2 x 100 2 x 100 = Rs. [ 1600 x 41 x 41 + 1600 x 41 ] 40 40 40 = Rs. [ 1600 x 41 ( 41 + 1 ) ] 40 40 = Rs. [ 1600 x 41 x 81 ] 40 x 40 = Rs. 3321. C.I. = Rs. ( 3321 - 3200 ) = Rs. 121
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