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The amount Rs.1000 grows to in 1 year at 8% compounded half-yearly is
ARs.1082.00
BRs.1100.00
CRs.1080.00
DRs.1081.60
Answer & Solution
Correct answer: D. Rs.1081.60
1. Half-yearly rate = 8%/2 = 4%; periods = 2 in 1 year.
2. A = 1000 * (1.04)^2.
3. (1.04)^2 = 1.0816.
4. A = 1000 * 1.0816 = 1081.60.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.9_
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