Which of the following rates of interest yield the maximum interest in 2 years on a certain sum?

  • Option 1)

    Interest compounded per month at 1% p.m.

  • Option 2)

    Interest compounded per month at 1.5% p.m.

  • Option 3)

    Interest compounded per half year at 6% per half year

  • Option 4)

    Interest compounded per year at 12% p.a.

  • Option 5)

    Interest compounded per quarter at 3% per quarter

Answers (1)

As interest compounded per month at 1 % so on a fixed principal interest will be given 12 times in a year, greater the no. of times of interest calculated greater the amount in the end.

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