A) 7401.22 | B) 3456 |

C) 4567 | D) 7890 |

Explanation:

With slight modifications, the basic formula can be made to deal with compounding at intervals other than annually.

Since the compounding is done at six-monthly intervals, 4 per cent (half of 8 per cent) will be added to the value on each occasion.

Hence we use r = 0.04. Further, there will be ten additions of interest during the five years, and so n = 10. The formula now gives:

V = P(1 + r)10 = 5,000 x (1.04)10 = 7,401.22

Thus the value in this instance will be £7,401.22.

In a case such as this, the 8 per cent is called a nominal annual

rate, and we are actually referring to 4 per cent per six months.

A) ₹ 1,740 | B) ₹ 1,760 |

C) ₹ 1,670 | D) ₹ 2,310 |

A) 4,040 | B) 4,080 |

C) 4,008 | D) 8,000 |

A) 8.69% | B) 7.69% |

C) 7.29% | D) 7.92% |

A) ₹2,750 | B) ₹1,650 |

C) ₹2,500 | D) ₹1,500 |

A) Rs. 5,937.5 | B) Rs. 5,992.5 |

C) Rs. 5,837.5 | D) Rs. 6,037.5 |