A person invests in the stock market at 10% per annum, compounded annually, for 1 years. If the interest was compounded half-yearly, he would have received Rs. 75 more. Find the sum that invest in the stock market.
1). Rs. 40,000
2). Rs. 35,000
3). Rs. 30,000
4). Rs. 38,000
When interest compounded annually, then person get 10% of the total sum
If interest compounded half-annually,
Interest rate = 5% and time t = 2
As we know, 5 + 5 + (5 × 5)/100 = 10.25%
If interest compounded half-annually, then person get 10.25% of the total sum
According to the question
⇒ 10.25% – 10% = 75
⇒ 0.25% = 75
⇒ 100% = 30,000
∴ The sum that invest in the stock market = Rs. 30000