Question : What is the effective annual rate of interest corresponding to a nominal rate of 10% per annum payable half-yearly?
Option 1: 10.25%
Option 2: 12.75%
Option 3: 9.25%
Option 4: 11.50%
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Correct Answer: 10.25%
Solution : Rate, $\frac{R}{2}$ = 10% Time, $n$ = 1 year Let principal sum, $P$ be INR 100. When compounded half-yearly, Amount = $P(1+\frac{\frac{R}{2}}{200})^{2n}$ = $100(1+\frac{10}{200})^{2}$ = $100(\frac{21}{20})^{2}$ = $\frac{441}{4}$ = INR 110.25 Effective rate = $\frac{110.25-100}{100}×100$ = 10.25% Hence, the correct answer is 10.25%
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Question : At what rate of compound interest per annum, a sum of Rs. 20,000 becomes Rs. 23,152.50 in 1 year and 6 months compounded half-yearly?
Option 1: 10% per annum
Option 2: 5% per annum
Option 3: 12% per annum
Option 4: 8% per annum
Question : At what rate of compound interest (compounding annually) per annum will a sum of Rs. 250000 becomes Rs. 275625 in 2 years?
Option 1: 8% per annum
Option 2: 3% per annum
Option 3: 10% per annum
Option 4: 5% per annum
Question : The difference between the simple interest and the compound interest at the same rate for INR 32,000 for 2 years is 80. What is the rate of interest, if in the case of compound interest, interest is compounded annually?
Option 2: 2% per annum
Option 3: 5% per annum
Option 4: 12% per annum
Question : What is the interest payable on INR 12,000 for 3 months at the rate of 10% per annum, if interest is compounded quarterly?
Option 1: INR 250
Option 2: INR 200
Option 3: INR 300
Option 4: INR 350
Question : On a certain sum of money, the simple interest for 2 years is INR 150 at the rate of 10% per annum. What is the difference between compound interest and simple interest for 2 years if, in the case of compound interest, interest is compounded annually at the rate of 10% per annum?
Option 1: INR 5
Option 2: INR 10
Option 3: INR 7.5
Option 4: INR 12.5
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