Sita deposited Rs. 5,000 at 10% simple interest for 2 years. How much more money will Sita have in her account at the end of two years. If it is compounded Semiannually.

Explanation:

Principal = Rs. 5000,

Rate % = 10 %

Time = 2 years

SI for 2 years =5000×2×10\100

= 1000

Note:When interest is compounded semi annually.

New Rate % =10\2 = 5 %

Time = 2×2= 4 years

Effective Rate % of for 4 years = 21.55 %

Required CI =5000×21.55\100

= Rs. 1077.50

Required amt. = Rs. (1077.50-1000 )

= Rs. 77.50