What is the compound interest (approximately) on Rs. 10,000 at 12% per annum for 2 years, compounded half-yearly? Options Rs. 2480 Rs. 2625 Rs. 2800 Rs. 2500

To calculate compound interest compounded half-yearly, we use the formula:

A = P (1 + r/n)^(nt)

Where: A = the amount of money accumulated after n years, including interest. P = principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years

Given in the problem: P = Rs. 10,000 r = 12% per annum = 0.12 (in decimal) n = 2 times per year (since it is compounded half-yearly) t = 2 years

Substituting these values into the formula:

A = 10000 * (1 + 0.12/2)^(2*2)

Calculating the above expression gives us the total amount after 2 years. To find the compound interest, we subtract the principal from this total amount.

Let's calculate:

A = 10000 * (1 + 0.06)^4 A = 10000 * 1.262476 A = Rs. 12624.76

So, the compound interest is A - P = 12624.76 - 10000 = Rs. 2624.76

So, the closest option is Rs. 2625.