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A sum of Rs. 50,000 is invested in a bank deposit for 1 year at an interest rate of 10% per annum, compounded on a half - yearly basis. What is the amount of interest at the end of 1 year?1. 51252. 52503. 55004. 5150 |
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Answer» Correct Answer - Option 1 : 5125 Given: Principal, p = Rs. 50,000 Time = 1 years Compounded half yearly, n = 2 Rate, r = 10/2 = 5% Formula used: Amount = Principal × [1 + r/100]n Amount = Principal + Interest Calculation: Amount = 50,000 × [1 + 5/100]2 ⇒ Amount = 50000 × 21/20 × 21/20 ⇒ Amount = 125 × 21 × 21 ⇒ Amount = Rs. 55,125 Amount = Principal + Interest ⇒ 55,125 = 50,000 + Interest ⇒ Amount of interest = Rs. 5,125 ∴ The amount of interest is Rs. 5,125. |
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