What is the difference between the compound interests on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?

What is the difference between the compound interests on Rs. 5000 for 1 1-div-1by2 years at 4% per annum compounded yearly and half-yearly?

Answer: Option A

Explanation:

C.I. when interest
compounded yearly

= Rs.

5000 x

1 +

1 +

x 4

100

= Rs.		5000 x	26	x	51
			25		50

= Rs. 5304.

C.I. when interest is
compounded half-yearly

= Rs.		5000 x		1 +	2		3
					100

= Rs.		5000 x	51	x	51	x	51
			50		50		50

= Rs. 5306.04

Difference = Rs. (5306.04 - 5304) = Rs. 2.04