1)

A sum of money is lent out at compound interest for 2 years at 20% per annum. It would fetch Rs. 482 more if the interest is compounded half yearly, than if it were compounded yearly, the sum of money is


A) Rs. 22,000

B) Rs. 20,000

C) Rs. 25,000

D) Rs. 24,000

E) Rs. 20,500

Answer:

Option B

Explanation:

$P\left[\left(1+\frac{10}{100}\right)^{4}\right]$ $-P\left[\left(1+\frac{20}{100}\right)^{2}\right]$ $= 482$

$P[\left(1+\frac{10}{100}\right)^{4}$ $-\left(1+\frac{20}{100}\right)^{2}]$ $= 482$

$\Leftrightarrow P[\left(\frac{11}{10}\times\frac{11}{10}\times\frac{11}{10}\times\frac{11}{10}\right)$ $-\left(\frac{6}{5}\times\frac{6}{5}\right)]$ $=482$

$\therefore P$ = 20,000