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A. Rs. 2.04
B. Rs. 3.06
C. Rs. 4.80
D. Rs. 8.30

Explanation:

C.I. when interest is compounded yearly

= [5000 * (1 + 4/100) * (1 + (1/2 * 4)/100]
= 5000 * 26/25 * 51/50 = Rs. 5304
C.I. when interest is compounded half-yearly
= [5000 * (1 + 2/100)2]
= (5000 * 51/50 * 51/50 * 51/50) = Rs. 5306.04 Difference = (5306.04 – 5304) = Rs. 2.04.

Correct Answer: Rs. 2.04

Last Updated: February 07, 2020