The effective annual rate for 20% per annum compounded half-yearly is: MCQ with Answer and Explanation

Question

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The effective annual rate for 20% per annum compounded half-yearly is:

A. 21.5%

B. 22%

C. 21%

D. 20.5%

Answer: Option C

Solution (By JKSSB Mock Tests)

Half-yearly rate 10%, (1.1)² = 1.21, effective = 21%.

This question belongs to: Maths Compound Interest

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Question #1

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If a sum of Rs. 8000 becomes Rs. 9261 in 3 years at compound interest compounded annually, find the rate of interest per annum.

A. 8%

B. 6%

C. 5%

D. 4%

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Correct Answer: Option C

Explanation:
Amount/Principal = 9261 / 8000 = (21 / 20)^3. Therefore, (1 + R/100)^3 = (21/20)^3 => 1 + R/100 = 21/20 => R/100 = 1/20 => R = 5%.

This question belongs to: Maths Compound Interest

Question #2

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A certain sum amounts to Rs. 2205 in 2 years at 5% compound interest. The sum is:

A. Rs. 2150

B. Rs. 2100

C. Rs. 2000

D. Rs. 1900

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Correct Answer: Option C

Explanation:
P = 2205 / (1.05)² = 2205 / 1.1025 = 2000.

This question belongs to: Maths Compound Interest

Question #3

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The value of a machine depreciates at 20% per annum. Its present value is Rs. 32000. What was its value 2 years ago?

A. Rs. 40000

B. Rs. 48000

C. Rs. 50000

D. Rs. 51200

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Correct Answer: Option C

Explanation:
Value 2 years ago = Present value / (1 − 0.2)² = 32000 / 0.64 = 50000.

This question belongs to: Maths Compound Interest

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