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The CI on Rs.8000 for 1.5 years at 10% per annum compounded half-yearly is
ARs.1261
BRs.1240
CRs.1300
DRs.1200
Answer & Solution
Correct answer: A. Rs.1261
1. Half-yearly rate = 5%; periods in 1.5 years = 3.
2. A = 8000 * (1.05)^3.
3. (1.05)^3 = 1.157625, so A = 8000 * 1.157625 = 9261.
4. CI = 9261 - 8000 = 1261.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.10_
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