| A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on January 1st and July 1st of a year. At the end of a year, the amount he would have gained by way of interest is how much? [SBI (SO) 2016] |
A) Rs. 120
B) Rs. 121
C) Rs. 123
D) Rs. 122
E) Rs. 119
Correct Answer: B
Solution :
| Amount |
| \[=\left[ 1600\times {{\left( 1+\frac{5}{200} \right)}^{2}}+1600\left( 1+\frac{5}{200} \right) \right]\] |
| \[=\left( 1600\times \frac{41}{40}\times \frac{41}{40}+1600\times \frac{41}{40} \right)\] |
| \[=\frac{1600\times 41\times 81}{40\times 40}=Rs.\,3321\] |
| \[\therefore \] Compound interest |
| \[=3321-3200=Rs.\,121\] |
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