Answer: Option A
$$\eqalign{
& {\text{C}}{\text{.I}}{\text{.}}\,{\text{when}}\,{\text{interest}}\,{\text{compounded}}\,{\text{yearly}} \cr
& = Rs.\left[ {5000 \times \left( {1 + \frac{4}{{100}}} \right) \times \left( {1 + \frac{{\frac{1}{2} \times 4}}{{100}}} \right)} \right] \cr
& = Rs.\left( {5000 \times \frac{{26}}{{25}} \times \frac{{51}}{{50}}} \right) \cr
& = Rs.5304 \cr
& {\text{C}}{\text{.I}}{\text{.}}\,{\text{when}}\,{\text{interest}}\,{\text{in}}\,{\text{compounded}}\,{\text{half - yearly}} \cr
& = Rs.\,\left[ {5000 \times {{\left( {1 + \frac{2}{{100}}} \right)}^3}} \right] \cr
& = Rs.\,\left( {5000 \times \frac{{51}}{{50}} \times \frac{{51}}{{50}} \times \frac{{51}}{{50}}} \right) \cr
& = Rs.\,5306.04 \cr
& \therefore {\text{Difference}} = Rs.\,\left( {5306.04 - 5304} \right) \cr
& \,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\, = Rs.\,2.04 \cr} $$