Find the difference between the Compound Interest on Rs.16000 for 1 year at 20% p.a. When compounded half yearly and quarterly.
A. Rs.88.10
B. Rs.78.80
C. Rs.110.20
D. Rs.94.40
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For Half yearly,
Rate = 20/2 = 10%.
Amount after two half year,
16000 === 10% up ==> 17600 == 10% up ===> Rs. 19360.
Interest = Rs. 3360.
For Quarterly,
Rate = 20/3 = 6.66%
Amount after rate taking quarterly,
16000 == 6.66% up = 17066 == 6.66% up == 18202 == 6.66% up == 19414.30.
Now required difference = 54.30.