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What is the difference between the compound interests on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?

Correct Answer: 2.04

Explanation:

C.I. when interest
compounded yearly=rs.[5000*(1+4/100)(1+1/2*4/100)]


= Rs. 5304.


C.I. when interest is
compounded half-yearly=rs.5000(1+2/100)^3


= Rs. 5306.04
Difference = Rs. (5306.04 - 5304) = Rs. 2.04


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