Tick (✓) the correct answer:
The compound interest on Rs 6250 at 8% per annum for 1 year, compounded half yearly, is
(a) Rs 500
(b) Rs 510
(c) Rs 550
(d) Rs 512.50
(b) Rs 510
Rate of interest compounded half yearly $=\frac{8}{2} \%=4 \%$
Time $=1$ year $=2$ half years
Now, $A=P \times\left(1+\frac{R}{100}\right)^{n}$
$=$ Rs. $6250 \times\left(1+\frac{4}{100}\right)^{2}$
$=$ Rs. $6250 \times\left(\frac{104}{100}\right)^{2}$
$=$ Rs. $6250 \times\left(\frac{26}{25}\right) \times\left(\frac{26}{25}\right)$
$=$ Rs. $(10 \times 26 \times 26)$
$=$ Rs. 6760
$\therefore$ Compound interest $=$ amount $-$ principal $=$ Rs. $(6760-6250)=$ Rs. 510
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