Nagma invested RS. 6000 in a company at a compound interest compounded semi - annually. She receives RS. 7986 after 18 months from the company, then the rate of interest per annum is 20%. State whether this is true or false.

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True

False

answer is A.

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Detailed Solution

Here, we use the formula of amount in a compound interest.
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Given: Interest is compounded semi-annually.
The rate of interest:

Here, we use above formula,
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r=10%
Therefore, we can say that the rate of interest semi – annually is 10%.
We can find the interest per annum by multiplying the semi – annual interest by 2.

Therefore, we can conclude that the rate of interest per annum is 20%.
Hence, the given statement is true.

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