The difference between the compound interest compounded yearly and half-yearly on Rs. 10000 for 18 months at 10% per annum is Rs. ____.

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Detailed Solution

Concept- The difference between the compound interest compounded yearly and half-yearly on Rs. 10000 for 18 months at 10% per annum is Rs. 26.25.
First, use the formula to get the amount of annual compound interest. Question Image

for the first year and then the formula Question Image

for the next 6 months. Then subtract the principal from the amount to get the interest.
Applying the formula, calculate the amount for the compound interest compounded every six months. Question Image

. The interest is then calculated by deducting the principle from the total.
Given:

months

year and

p.a.
For 1 year
Question Image

Rs. 11,000
For

year

Rs. 11,

year and

Rs. 11,550

C.I. = Rs.

(ii) When interest is compounded half-yearly

Rs. 10,