What is the difference between the compound interests on Rs. 5000 for 1 years at 4% per annum compounded yearly and half-yearly?
Explanation:
C.I. when interest compounded yearly =5000×1+4100×1+12×4100=5000×2625×5150=5304
C.I. when interest is compounded half-yearly =
5000×1+21003=5000×5150×5150×5150=5306.04
∴ Difference = Rs. (5306.04 - 5304) = Rs. 2.04
Hence, option (a).
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