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Railways PYQCBT 1 2016

RRB NTPC · Question 47

What is the difference between the compound interests on a sum Rs. 10,000 for 1 year at 10% per annum, when compounded yearly and half-yearly?

  1. Rs. 10

  2. Rs. 25

  3. Rs. 5

  4. Rs. 50

Show answer & explanation

Answer: (B) Rs. 25

Explanation

Compounded yearly at 10%, the interest for 1 year = Rs 1,000. Compounded half-yearly, the rate is 5% per half-year for 2 half-years: 10000 × (1.05² − 1) = 10000 × 0.1025 = Rs 1,025. The difference = Rs 25.