Find compound interest on Rs. 5000 at 12% p.a. for 1 year compounded half-yearly.

Correct option is B

Ans. (b)
Sol.
Given:
Principal (P) = Rs. 5000
Rate of interest (R) = 12% per annum
Time (T) = 1 year
Compounded half-yearly ⇒
Half-yearly rate = 12% ÷ 2 = 6%
Number of compounding periods = 1 × 2 = 2
Formula for Compound Amount (A):
A = P × (1 + R/100)ⁿ
A = 5000 × (1 + 6/100)²
A = 5000 × (1.06)² = 5000 × 1.1236 = Rs. 5618
Compound Interest (CI) = A – P = 5618 – 5000 = Rs. 618