The effective rate of interest for 5% per annum compounded half-yearly is: MCQ with Answer and Explanation

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The effective rate of interest for 5% per annum compounded half-yearly is:

A. 5.05%

B. 5.10%

C. 5.0625%

D. 5.12%

Answer: Option C

Solution (By JKSSB Mock Tests)

Effective rate = (1.025)² − 1 = 1.050625 − 1 = 5.0625%.

This question belongs to: Maths Compound Interest

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Practice More Compound Interest Questions

Question #1

The compound interest on Rs. 1000 at 10% per annum for 2 years compounded half-yearly is:

A. Rs. 225

B. Rs. 220

C. Rs. 210

D. Rs. 215.50

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Correct Answer: Option D

Explanation:
Half-yearly rate 5%, n=4. A = 1000 × (1.05)⁴ = 1000 × 1.21550625 = 1215.50625, CI ≈ Rs. 215.50.

This question belongs to: Maths Compound Interest

Question #2

Find the compound interest on Rs. 17500 at 8% per annum for 2 years.

A. Rs. 2968

B. Rs. 2940

C. Rs. 3000

D. Rs. 2912

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Correct Answer: Option D

Explanation:
A = 17500 × 1.1664 = 20412, CI = 20412 − 17500 = Rs. 2912.

This question belongs to: Maths Compound Interest

Question #3

The population of a city increases at the rate of 5% annually. If the present population is 185220, what was its population 3 years ago?

A. 150000

B. 170000

C. 180000

D. 160000

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Correct Answer: Option D

Explanation:
Population 3 years ago = 185220 / (1 + 5/100)^3 = 185220 / (21/20)^3 = 185220 * 8000 / 9261 = 20 * 8000 = 160000.

This question belongs to: Maths Compound Interest

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