- 20
- 21
- 25
- 22

Option 1 : 20

**Given:**

Difference between compound interest on a sum of Rs.8000 for one year at the rate of 10% per annum, interest compounded yearly and half yearly.

**Concept:**

Compound interest

**Calculation:**

Yearly at the rate of 10% for one year is 10%

Half yearly = 10/2 = 5%

Compound interest for one year is \(\left( {x + y + \frac{{xy}}{{100}}} \right)\% \)

Compound interest for one year at 5 % = \(\left( {5 + 5 + \frac{{25}}{{100}}} \right)\% \)

⇒ 10.25% is the half yearly interest

Difference of yearly and half yearly interest rate

⇒ 10.25% - 10% = 0.25%

Now 0.25% of 8000

⇒ \(\frac{{25}}{{10000}} \times 8000 = 20\)

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