Question
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:
Answer: Option B
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Amount = Rs.\(\left[1600\times\left(1+\frac{5}{2\times100}\right)^{2}+1600\times\left(1+\frac{5}{2\times100}\right)\right]\)
= Rs. \(\left[1600\times\frac{41}{40}\times\frac{41}{40}+1600\times\frac{41}{40}\right]\)
= Rs. \(\left[1600\times\frac{41}{40}\left(\frac{41}{40}+1\right)\right]\)
= Rs. \(\left[\frac{1600\times41\times81}{40\times40}\right]\)
= Rs. 33.21
So, C.I. = Rs. (3321 - 3200) = Rs. 121
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