Arithmetichard · Past Paper

At what rate of compound interest will Rs 2000 become Rs 2662 in 1.5 years if interest is compounded half-yearly?

A10%
B20%
C15%
D12%

✓ Correct Answer: B20%

T = 3 periods. 2662/2000 = (1 + r)^3 => 1.331 = (1 + r)^3 => 1.1 = 1 + r => r = 0.1 (half-yearly). Annual R = 20%.

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