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What will be the difference in the compound interest on ₹ 50000 at 12% for one year, when the interest is paid yearly and half- yearly?

Correct Answer: ₹ 180

Explanation:

CI on ₹ 50000 at the rate of 12% for one year, when the interest is paid half-yearly
= 50000(1 + 6/100)2 - 50000
= [50000 x (53/50) x (53/50)] - 50000 = ₹ 6180
CI when the interest is paid yearly
= 50000(1 + 12/100)1 - 50000
= 50000(28/25 - 1) = 50000(3/25) = ₹ 6000
∴ Required difference = CI - SI = 6180 - 6000 = ₹ 180


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