1.  What is the difference between the compound interest on ₹ 5000 for 1.5 years at 4% per annum compounded yearly and half-yearly?
A. ₹ 2.04
B. ₹ 3.06
C. ₹ 4.80
D. ₹ 8.30

Answer: Option A

Explanation:

C.I. when interest
compounded yearly    

= ₹ 5000 x 1 + 4 x 1 + x 4
100 100
= ₹ 5000 x 26 x 51
25 50
= ₹ 5304.

C.I. when interest is
compounded half-yearly

= ₹ 5000 x 1 + 2 3
100
= ₹ 5000 x 51 x 51 x 51
50 50 50
= ₹ 5306.04

∴Difference = ₹ (5306.04 - 5304) = ₹ 2.04