Rakesh lent out Rs. 10000 for 2 years at 20% per annum, compounded annually. How much more he could earn if the interest be compounded half-yearly?
Given,
Principal = Rs.10000
Rate = 20%
Time = 2 year
Hence,
Compound interest =
=
If interest compounded half yearly ,
Rate =
Time = 2×2 = 4 half years
Hence,
Compound interest =
= 10000
So,
If Rakesh can earn = Rs.(4641 – 4400 ) = Rs.241 more