Question

A moneylender lends a sum of Rs 8000 to the borrower at 30% per annum on compound interest for 1 year, then what will be the interest after 1 year if interest is compounded half-yearly?
1. Rs. 2400
2. Rs. 2580
3. Rs. 1200
4. Rs. 3000

Answer 1

Correct Answer - Option 2 : Rs. 2580

Given: 

Principal = Rs. 8000 

Rate of interest = 30% 

Time = 2 years 

Formula used: 

Amount = Principal(1 + R/100)^t

Calculation:

Rate of interest for 6 months = R/2 = 30/2 = 15% 

Amount = Principal(1 + R/100)t

⇒ Amount = 8000 × (1 + 15/100)²

⇒ Amount = 8000 × (23/20) × (23/20)

⇒ Amount = 20 × 529 

⇒ Amount = Rs. 10580

⇒ Interest = Amount – principal

⇒ Interest = 10580 – 8000 = Rs. 2580

∴ The simple interest is Rs. 2580