Correct option is A
Given:
Annual interest rate = 12%
Compounded half-yearly
Time = 1 year
Formula Used:
Compound Amount for half-yearly compounding:
A =
Compound Interest (CI) = A − P
Simple Interest (SI) =
Difference = CI − SI
Solution:
Let Principal P = 100
Half-yearly rate =
Compounded twice:
A =
= 112.36
CI = 112.36 - 100 = 12.36
Now,
SI =
Extra Interest = 12.36 - 12 = 0.36
Thus, 0.36% more would be earned in a year.