1.  A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits ₹ 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:

A. ₹ 120
B. ₹ 121
C. ₹ 122
D. ₹ 123

Answer: Option B

Explanation:

Amount:

= ₹ 1600 x 1 + 5 2 + 1600 x 1 + 5
2 x 100 2 x 100
= ₹ 1600 x 41 x 41 + 1600 x 41
40 40 40
= ₹ 1600 x 41 41 + 1
40 40
= ₹ 1600 x 41 x 81
40 x 40
= ₹ 3321.

∴ C.I. = ₹ (3321 - 3200) = Rs. 121