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

Question

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

A. 5.10%

B. 5.12%

C. 5.0625%

D. 5.05%

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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Question #1

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At what rate percent per annum will Rs. 32000 amount to Rs. 37232 in 3 years, compound interest compounded annually?

A. 6%

B. 8%

C. 4%

D. 5%

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Correct Answer: Option D

Explanation:
Amount/Principal = 37232 / 32000 = 4654 / 4000 = 9261 / 8000 = (21 / 20)^3. Therefore, 1 + R/100 = 21/20 => R/100 = 1/20 => R = 5%.

This question belongs to: Maths Compound Interest

Question #2

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The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 246. What is the sum?

A. Rs. 2400

B. Rs. 2500

C. Rs. 2600

D. Rs. 2200

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Correct Answer: Option A

Explanation:
Effective compound interest rate for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 246 => P = 246 / 0.1025 = Rs. 2400.

This question belongs to: Maths Compound Interest

Question #3

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A sum becomes Rs. 10816 in 2 years at 4% compound interest. Find the sum.

A. Rs. 10000

B. Rs. 10500

C. Rs. 11000

D. Rs. 9500

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Correct Answer: Option A

Explanation:
P = 10816 / (1.04)² = 10816 / 1.0816 = 10000.

This question belongs to: Maths Compound Interest

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